Why do you pay auto insurance?
Auto insurance is required by law. In case of an accident, all affected parties and property must be covered financially. Compare accurate quotes easily below.
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UPDATED: Oct 22, 2021
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- Without car insurance, an accident could cost you thousands of dollars
- Car insurance is required by law
- Car insurance can protect you in the case of a liability lawsuit
- You may be able to get discounts on car insurance
Paying for car insurance may seem like another bill that you aren’t benefiting from on a month-to-month basis, but in the event that you get into a serious car accident, it can make all the difference.
Find out why you pay car insurance and what you are gaining from those payments.
Start comparing car insurance policies today to make sure you are getting the best deal. Enter your zip code into our free comparison tool!
What is car insurance?
Each year millions of people are injured in car accidents across the United States. Car insurance companies offer policy protection in exchange for your timely payments of the premium. The kind of protection you pay for varies from policy to policy, but typically the most common types of coverage are:
The kind of protection you pay for varies from policy to policy, but typically the most common types of coverage are:
- Liability Coverage – the purpose of this insurance is to cover injuries or damage to other people or property when you are found at fault for an accident
- Collision Coverage – pays for damage to your vehicle in an accident. In the event your vehicle is totaled, it would pay the market value that your vehicle is worth
- Comprehensive Coverage – pays for damage not caused by an auto accident. Common instances where this coverage would apply include fire, theft, and vandalism
This is not an all-inclusive list of coverage as there are many optional insurances to choose from such as uninsured motorist coverage, underinsured motorist coverage, and medical expense coverage, among others.
One thing you should note is that the federal government does not mandate insurance. The laws are set at the state level, meaning each state has their own coverage requirements.
To find out what your state’s minimum requirements are, check with your state’s Department of Motor Vehicles website.
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What do you get from car insurance?
Having car insurance is more than just a convenience, especially if you consider that an accident causing a severe injury could cost $70,500 on average. When you look at the numbers like that, car insurance is a necessity.
Your liability coverage can also help protect you if someone decides to sue you if you are at fault in an accident. Those amounts alone could be in the hundreds of thousands of dollars.
This is why it is important to ensure that you have the proper amount of insurance coverage.
How to Get the Best Deal on Car Insurance
Insurance companies offer a variety of policies with different coverage options and amounts. You don’t always need the most expensive policy in order to be adequately covered either.
There is such a thing as being over-insured with car insurance, but it is important also not to be underinsured.
Finding the happy medium is where you will get the right amount of coverage for the right amount of money. The most important thing is to evaluate your financial situation and see what coverage works best for you.
Also, don’t forget to shop around and compare quotes. This comparison will allow you to get some of the best deals.
Getting the best price doesn’t always mean that you are getting the best deal. Always be sure to do your research on the company and make sure that they are legitimate, in good standing, and pay out on their customer’s insurance claims.
You can also check the insurance company’s complaint record at the National Association of Insurance Commissioners. Paying your premium on time is of utmost importance.
If you forget to pay your car insurance, your policy can lapse and you can go unprotected, not to mention, you face the possibility of fines and penalties as well as future rate increases.
Most insurance companies offer flexible payment plans, including monthly, quarterly, semi-annual or annual payments.
The key is the more you pay up front, the more you will save in the long run. However, the monthly payment option is convenient if you can’t typically afford a large sum all at once.
There are other ways that you may be able to help save money on car insurance, including:
- Establishing yourself as a good driver with a history free of accident claims.
- Becoming a member of a professional organization recognized by the insurance company.
- Having an occupation that is considered low-risk for accidents.
- Driving under a certain mileage cap.
Having car insurance is essential. The protection it offers could save you thousands of dollars. Not only is it illegal to drive without insurance, but it can also put you at a huge financial risk.
If you are in the market for auto insurance, start comparing quotes today! Enter your zip code into our free comparison tool to get started!