What are the advantages of car insurance?

48 out of 50 legally require certain auto insurance minimums. Having a policy on your vehicle will protect you from lawsuits and payments for damages.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Nov 9, 2021

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Here's what you need to know...

  • Car insurance saves you from legal actions and loss
  • The coverage also provides peace of mind when you are driving
  • Auto insurance protects your property and makes it easier to replace or repair damages

Car insurance, or proof of financial responsibility, is required in every state in the U.S.

There are major reasons why most states require car insurance. In order for you to understand just how vital auto insurance coverage is, as well as how the car insurance industry operates, read the article below.

Then, enter your ZIP code above for car insurance quotes from top companies in your area!

Advantages of Car Insurance


The advantages of having auto insurance far outweigh the disadvantages when you think about the potential loss of property due to an accident.

Here are some of the advantages of having car insurance:

  • It reduces the number of lawsuits By carrying insurance, you protected from accidents, regardless of whether they are considered your fault
  • It gives you peace of mind If you do not have insurance, you would have to use your own money to get your car fixed after an accident
  • It ensures reliable transportation Many insurance policies offer additional car rental insurance as an option

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It’s the Law

Gavel On a Legal Text

Carrying the state minimums on auto insurance is the law.

If you are in an accident and were carrying no liability and personal injury insurance, you could be looking at court fines in addition to civil liabilities if someone is injured or killed.

In some cases, failing to have insurance and then being involved in a serious accident could result in felony charges being brought against you, especially if DUI is involved or any sort of reckless or distracted driving.

Most of this will depend on the extent of injuries. A negligent homicide charge is the most serious and is considered third-degree murder.

You are required to have proof of insurance in your car at all times.

If you are stopped by a police officer during a routine traffic check without being able to provide insurance coverage papers, you could be fined anywhere from $400 to $1000.

Check the regulations for your particular state to find out how that applies to you.


What to Look for When Comparing Policies

When you are shopping for car insurance, there are some important aspects that you should look for to ensure that you get what you need.

Many auto insurance carriers have all of these, but some have none or only some of them, so you should consider carefully before purchasing:

  • Uninsured Motorist Coverage This type of coverage is designed to cover anything the driver does not carry with his insurance if they are ruled at fault in an accident
  • Underinsured Motorist Coverage Underinsured motorist coverage is intended to cover damages or injuries that you receive from a motorist who does not have adequate coverage
  • Accidental death rider  Some insurance providers allow for an extra accidental death benefit in the event of an accident in which you or others in your car are killed
  • Medical Expenses Coverage This type of coverage covers any medical expenses and loss incurred due to the accident in which you are involved
  • Motorcycle coverage If you ride a motorcycle, it would be wise to purchase motorcycle coverage as well. Remember that auto insurance itself does not cover motorcycle accidents
  • Car rental Car rental insurance covers the cost of car rentals that you use while your vehicle is being repaired

These are a few of the options that you will encounter when shopping for car insurance.

Whether or not you select these extra options and riders is totally up to you.

You will just have to consider whether your risk is significant enough to justify the cost you would spend on monthly premiums when you choose any or all of these options.

The Ultimate Question

When shopping for car insurance, the ultimate question you need to be able to answer is how much coverage you actually need.

Start with the state minimum requirement for auto insurance, and then consider whether adding more coverage to your policy would be a good choice.

You always have to balance this with how much insurance you can actually afford. If you take on more insurance premiums than you can afford, you may end up dropping all of it.

Stick to the highest amount of coverage you can comfortably afford and compare rates among similar carriers.

Be sure to ask plenty of questions on anything you do not fully understand.

Enter your ZIP code below to access car insurance quotes from multiple companies today!

    1. https://content.naic.org/state-insurance-departments
    2. https://www.investopedia.com/articles/pf/06/carinsurance.asp

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