Search

Why Is Auto Insurance Important? Get Best Quotes

In the unlikely event that you are in an accident and don’t have car insurance, you could be held responsible for the harm done. Here are top reasons why auto insurance is important to protect you and your vehicle.
why auto insurance important
Why Is Auto Insurance Important? Get Best Quotes
Almost all states require drivers to have car insurance, and driving without it can end you up with hefty fines. Let's understand why auto insurance is essential for all vehicle owners in the US.
In this article

According to a Bureau of Labor Statistics estimate, a car accident happens in the US every 13 minutes. Car insurance is, therefore, essential to shield consumers from hazards following an accident.

In the unlikely event that you are in an accident and don’t have car insurance, you could be held responsible for the harm done. If you pay for these payments out of pocket, they may be rather expensive.

When adding up the costs for property damage and body injury, an auto insurance claim could be around $20,000. Auto insurance covers vehicle repair, pharmacy costs, and property damage after an accident.

As a result, all states require drivers to have car insurance, and driving without it can end you up with hefty fines.

Before buying the car insurance, it is important to compare quotes from different providers to get the best deal. Use Beem to find the best insurance quotes to make the right choice for your requirements. Let’s understand why auto insurance is essential for all vehicle owners in the US.

10 Reasons Why Car Insurance Is Important

Here are the top 10 reasons why you need car insurance as a vehicle-owner in the country:

1. Car Insurance Is a Compulsory Requirement by Law

Automobile insurance is mandated by law in almost all states. Although there are various levels of coverage, a minimal standard is almost always required. Auto insurance protects if the accident results in property damage or medical injuries to passengers other than the driver. 

2. Financial Protection

Usually, the person causing the accident ends up paying for all the damage and related costs. A legal requirement for automobile insurance is a testament to its critical role in promoting financial responsibility. It safeguards individuals and their assets in the event of unforeseen accidents.

3. To Pay Restitution for an Accident You Caused

Being the cause of an accident can be an incredibly stressful experience for any driver. In such situations, the financial responsibility for the resulting costs often falls squarely on your shoulders.

However, specific types of insurance coverage, such as collision insurance and personal injury protection, can substantially relieve this burden, regardless of the party at fault. 

Collision insurance, for instance, typically covers the costs of repairing or replacing your vehicle, even if you were the one responsible for the accident.

Similarly, personal injury protection (PIP) insurance goes a step further by covering your medical expenses and, in some cases, other related costs, irrespective of fault.

4. To Pay You for an Accident Someone Else Caused

Auto insurance acts as a safety net if you ever get involved in an accident with a driver without insurance. Claiming the refund you rightfully deserve can be a frustrating procedure.

During this time, you’re left shouldering the financial burden of vehicle repairs, medical expenses, and more.

This strains your finances and can impact your credit score and overall peace of mind. This is precisely why they refer to it as “liability coverage“. In such cases, the other driver is considered “liable” for covering the damage costs to your vehicle (property liability coverage) and your medical bills (bodily injury liability coverage).

5. Auto Insurance Ensures the Protection of Passengers

In the case of an accident with a car full of passengers, you may become liable to pay for their injuries, too. Therefore, it’s crucial to understand that car insurance also covers injuries and damages caused to passengers.

Note that the third-party liability insurance is specially designed to protect individuals who are not the drivers involved in the accident.

If you are at fault in an accident, a broad policy is supposed to assist you in paying for medical bills caused by other people who were hurt due to the collision.    

Even if you have passengers in your vehicle and the accident is not your fault, you can generally rely on either your insurance or the driver’s insurance to cover the medical cost of the injuries sustained by your passengers.

This ensures that passengers receive compensation for their medical bills and injuries, regardless of the driver’s liability.

6. Auto Insurance Ensures Your Protection

For other people’s expenses, liability insurance is relevant. However, if you consider your vehicle, two additional types of auto insurance shield your vehicle from various potential harms. Most drivers have collision and comprehensive coverage, even though it is not required.

Whether you are at fault for the accident or not, collision coverage financially protects your car. This includes collisions with objects or other vehicles.

You are protected even if you swerved into a tree or overturned on your own because it also covers accidents involving single drivers. Your car is protected from the damage it might sustain while not being driven by comprehensive coverage. Theft, vandalism, and weather damage are some examples of this.

7. Auto Insurance Helps You Get Your Car Fixed

While liability insurance primarily comes into play to cover other people’s expenses in the event of an accident, two other essential types of auto insurance focus on protecting your vehicle from various potential damages: collision and comprehensive coverage.

Although these types of coverage are not mandatory, they are commonly chosen by most drivers due to the significant protection they provide.

  • Collision Coverage: It is designed to provide financial protection for your vehicle in case of an accident, regardless of whether you are at fault. This coverage extends to accidents, including collisions with other vehicles and objects or single-driver accidents, such as hitting a tree or rolling over.
  • Comprehensive Coverage: This protects your vehicle against damage incurred when it’s not in use. This broad coverage encompasses a range of potential risks, such as theft, vandalism, weather-related damage (like hail or floods), and more.

8. Auto Insurance Protects Businesses That Own Cars

Businesses that deliver goods, home service providers, ride-sharing companies, taxi services, and moving companies rely heavily on automobiles to conduct their operations.

Maintaining insurance coverage is crucial even if your company owns vehicles that aren’t used regularly. In many cases, opting for commercial insurance policies is the most sensitive choice.

Commercial auto insurance ensures that your business and its drivers are sufficiently protected. This is particularly vital in an accident, as it protects your company from potentially crippling financial hardships. Whether your vehicles are used daily or rarely, having commercial insurance offers peace of mind and financial security, which are necessary for the continued smooth operation of your business.

9. Auto Insurance Can Supplement Your Health Insurance

The intersection of car and health insurance can be a concern for individuals. While health insurance typically covers certain medical expenses, there are specific scenarios in which auto insurance can come into play. It will especially help in covering the costs of injuries resulting from car accidents.

For instance, if you’ve experienced a dental concussion due to a car accident, your regular health insurance may not cover all treatments or may have limitations.

However, your auto insurance, particularly personal injury protection (PIP) or medical payment coverage, can often step in to help cover some of the expenses related to dental care.

10. Auto Insurance Ensures You Have Peace of Mind While Driving.

Owning auto insurance provides peace of mind for drivers. It is more than confidence in one’s driving skills because unseen accidents may occur anytime and under any circumstances. 

State Average Monthly PremiumAverage Annual Premium
Washington, D.C.$184$2,204
California$142$1,709
Florida$222$2,668
Georgia$167$1,998
Hawaii$128$1,533
Texas$167$2,008
Kentucky$214$2,563
Pennsylvania$149$1,783
New Jersey$184$2,213
New York$226$2,716
(Minimum car insurance requirements by state)
auto insurance ensures you have peace of mind while driving.

Key Points Highlighting the Importance of Auto Insurance

  • Protection From Unexpected Accidents: No matter how experienced a driver must be, a few situations always require overwhelming expenses. Here, auto insurance stops the driver from paying these expenses alone. 
  • Legal compliance: In many areas, auto insurance is a legal requirement. Not carrying insurance may result in penalties, fines, or legal allegations. Compliance with these laws ensures you are financially stable enough to pay these expenses.
  • Financial security: Money matters to everyone; it is essential for you and your family’s future. Auto insurance is a crucial safety net for individuals who can’t afford to face unexpected situations. You definitely don’t want to burdened by hefty charges involved in car accidents. It looks after expenditures such as vehicle repairs, medical fees, etc.

Conclusion

While the concept of insurance might sometimes raise skepticism, it undeniably plays a crucial role in maintaining the stability of our society.

It is a linchpin that fosters peace, safeguards our means of living, and maintains order in our legal system. Its fundamental purpose is to promote stability, security, and fairness in our society. It acts as a safeguard that allows us to navigate life’s fates with greater confidence and assurance.

Although auto insurance is important to help you balance your finances, you should always be careful while driving to avoid accidents. Therefore, Beem provides a one-stop solution to compare options from different insurance providers to help you get the best deal and save hundreds of dollars every year.

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!

👍👎

Author

Picture of Aniket Kulkarni

Aniket Kulkarni

A seasoned Product Manager specializing in car insurance content, Aniket has a passion for simplifying complex insurance concepts. His strategic approach to content development reflects years of experience in the product development industry, coupled with a commitment to providing accurate, reliable information.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts
What is a Deductible in Car Insurance?
A deductible in car insurance is the amount of money you will contribute to the insurer before the policy coverage kicks in. It's often deployed to auto-cover collision policies, which are compulsory when buying or taking out a loan. But why? We explain.
car insurance in Homestead
Car Insurance In Homestead, FL
Understanding car insurance requirements in Homestead is not just about compliance with the law; it’s about protecting yourself and others on the road. Let’s take a deep dive into the world of car insurance in Homestead, FL.
Car Insurance in Rocky Mount
Car Insurance in Rocky Mount, NC
Car insurance in Rocky Mount is influenced by age, gender, driving record, vehicle type, and mileage. Factors like credit score, location, and coverage choices also impact rates.
Car Insurance in Dublin GA-2
Car Insurance in Dublin GA
Car insurance provides financial protection if your vehicle has been damaged or stolen depending on the policy you choose. The insurance helps meet the minimum coverage requirements mandated by the state or required by a lender. Let's understand the details related to getting the best car insurance in Dublin GA to make an informed decision.
does gap insurance cover transmission
Does Gap Insurance Cover Transmission?
The term "gap" refers to the disparity or gap between the loan or lease balance and the vehicle's fair market value. So, does gap insurance cover transmission?
Best Car Insurance in Lakeland, FL
Best Car Insurance in Lakeland, FL
In Lakeland, FL, the average yearly vehicle insurance cost is $2,154, providing insights for drivers navigating the market; read on to learn how to acquire ideal coverage at competitive prices!
Features
Essentials

Get up to $1,000 for emergencies

Send money to anyone in the US

Ger personalized financial insights

Monitor and grow credit score

Save up to 40% on car insurance

Get up to $1,000 for loss of income

Insure up to $1 Million

Coming Soon

File federal and state taxes at low cost

Quick estimate of your tax returns

Get up to $1,000 for emergencies

Send money to anyone in the US

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: