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 Premium | Average 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 |
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.
