Auto insurance is essential. You can’t drive without it, in fact, most states require drivers to carry it by law. Here’s why: car accidents happen—and they happen pretty often. In fact, on average, there are more than 6 million car accidents per year in the U.S. That’s a lot of fender benders. And while some accidents are minor—some are major—and at the very least, they’re all an inconvenience.
You might be the best driver on the road. Maybe you’ve never been in an accident. You are never distracted behind the wheel. You don’t check your phone at a red light. You always obey the law. You get a gold star! Keep up the good driving! Several insurance companies will offer you a break on your rates, for being so legit in your driving skills. Unfortunately, though, there are a lot of not-so-good drivers out there, too. Because other drivers can be unpredictable, unavoidable accidents happen all the time.
In a world without car insurance, any time you took a spin, you’d be risking everything. A good car insurance policy protects your finances, and lets you drive with the confidence that you’re covered, should anything happen.
Having car insurance means that you pay a little over time, to save a lot in the occurrence of an incident. The average property damage cost of an accident in 2013 was over $9,000. When an accident caused injury, the average cost was over $80,000 per crash.
Car Insurance 101
Here’s a brief description of the different types of coverage. One policy can include more than one type, and coverage laws vary state by state.
Coverage Types:
1. Liability Insurance—If you cause an accident, liability insurance pays for the damage and injuries to others. Liability coverage is required by most states.
2. Personal injury protection (PIP)—This is coverage that pays medical bills for you and your passengers after a car accident, regardless of who caused the crash.
3. Uninsured motorist (UM) and Underinsured Motorist (UIM)— If you're hit by a driver who has no insurance or not enough coverage, you’re covered with UM or UIM. UIM works also if your medical expenses exceed the other driver's liability coverage limits.
4. Uninsured motorist property damage (UMPD)— UMPD covers your car if an uninsured driver hits you.
5. Collision Coverage—Collision coverage pays to repair your vehicle after a crash. It's an optional form of coverage, although if you lease or have a loan on your car, the lender might require you to have it.
6. Comprehensive Coverage—This pays out if your car is stolen (and not recovered) or damaged by a natural disaster or if you hit an animal.
7. Roadside Assistance & Other Add-Ons—Roadside assistance covers towing and emergency roadside service when your car breaks down. Rental reimbursement pays for a rental car while your car is in the shop after a covered accident.
By having insurance, you also get the assistance you need from experts who know what they’re talking about. Your insurer can help you with all the post-accident hassle—like filing a claim, working with another driver’s insurance and getting your claim settled quickly and easily.
Shop around for insurance that suits your needs. Then you can drive easily—and not worry about hitting anything but the road.
