Understand Car Insurance And Why You Can't Do Without It
Posted on: 21 December 2022
Are you gearing up to buy your first car? Buying a car demonstrates that you're ready to have ownership of what you drive. But, it also bestows upon you the responsibility of ensuring your vehicle is roadworthy and street-legal.
Having car insurance is one of the legal requirements for owning a car. Before you purchase a car insurance policy, you should understand car insurance and why it's so important.
What Is Car Insurance?
As the name implies, car insurance is a type of insurance that offers you protection against financial losses that may occur in the event of a car-related mishap. Different types of car insurance are available to provide coverage against the various risks you face as a car owner, with some offering greater protection than others.
The most common types of auto insurance coverage include the following:
- Liability-Only Coverage – This is the most basic form of auto insurance coverage and is mandatory in most states. It covers two components — bodily injury liability and property damage liability — your legal responsibility to others for bodily injury or property damage while driving.
- Collision Coverage – Helps you pay for repairs or replacement of your car if you're involved in a collision — that is, following collision damage.
- Uninsured/Underinsured Coverage – An optional type of auto insurance you purchase to protect yourself against financial loss in the event that the other party is uninsured or doesn't have enough insurance.
- Comprehensive Coverage – Unlike liability coverage, comprehensive insurance protects both you and other road users against bodily injury and property damage. It provides coverage against the widest range of risks you face on and off the road, including fire and hail damage.
What Are The Benefits Of Car Insurance?
Beyond ensuring legal compliance, having auto insurance is beneficial to you in many ways, including the following:
- It Protects Your Investment In A Car – Buying a car, especially a new one, requires a significant financial investment. Having auto insurance helps you protect that investment against potential loss or damage.
- It Protects You Against Third-Party Liability Claims – Car insurance helps with your third-party liability claims, eliminating out-of-pocket payments for bodily injury or property damage to others.
- It Gives You Peace Of Mind – Driving an insured car gives you the confidence to go wherever you want without constantly worrying about the risks you face and your legal responsibility to others, improving your overall ride quality.
Ready to purchase your car insurance? Every car owner's auto insurance needs are unique and different. Get in touch with an auto insurance broker near you to discuss your needs and get your free, no-obligation quote.
Share