Car insurance is a contract between you and your insurance company that you agree to pay to protect you from financial loss due to an accident or other damage to your car. Car insurance can pay for:
- Damage to vehicles, including your own car or the driver’s car
- Property damage
- Personal injury resulting from an accident.
Is Car Insurance Required?
Nearly all states require drivers to carry car insurance and carry identification in the vehicle. Hartford said New Hampshire drivers do not have to buy car insurance but must present evidence that they will be covered for accident costs if they are at fault. According to AAA, each state sets limits on what motorists must purchase.
Having third party or third party insurance is compulsory and you should take out a policy whether you are buying a new or used car. You can also purchase the entire plan. Third-party insurance covers you for the legal and financial obligations of others. This comprehensive policy protects you from accidental damage, fire, theft and natural disasters.
Auto Insurance benefits
Car insurance has many benefits, especially if you are involved in an accident. Without insurance, you would have to pay for the damage out of pocket and drive off on your own.
No matter where you drive, car accidents happen. According to the National Highway Traffic Safety Administration and the U.S. Department of Transportation, in 2017, there were 34,247 accidents in the United States. These accidents involved 52,645 vehicles and killed 37,133 people.
If you are involved in a car accident, you may be responsible for the costs associated with it. This includes legal fees, medical bills and lost income. You pay for it out of your own pocket without any form of support. Additionally, if your car breaks down, the insurance will cover the cost of replacement and repairs.
- Financial Protection: Auto insurance protects drivers from financial losses due to accidents, theft, or damage to their vehicles. Without insurance, these costs could be financially devastating.
- Legal Compliance: In many places, having auto insurance is a legal requirement. It ensures that drivers are compliant with local laws regarding vehicle ownership and operation.
- Medical Coverage: Depending on the policy, auto insurance can cover medical expenses for injuries sustained in an accident, including rehabilitation and sometimes lost wages.
- Property Damage Coverage: Insurance can cover the costs of repairing or replacing other people’s property that you may damage in an accident, such as another vehicle or public infrastructure.
- Peace of Mind: Knowing you are protected against unforeseen events while driving can provide peace of mind, reducing stress related to potential financial liabilities.
- Helps Maintain Infrastructure: Insurance premiums contribute to the funding of road maintenance and other infrastructure improvements through government fees and taxes, indirectly benefiting society.
- Risk Management: Insurance companies assess risks and encourage safer driving behaviors through premiums and incentives, which can contribute to overall road safety.
- Supports the Economy: Auto insurance is a significant industry that employs many people and supports related sectors such as healthcare and vehicle repair.
Overall, auto insurance plays a crucial role in protecting individuals and society from the financial and personal consequences of accidents and unforeseen events on the road.