There is a short and long answer to this question. There wouldn’t be a need for a blog post if there wasn’t a long answer. But the long answer helps you understand the why that is extremely important to understand.
What is Auto Insurance?
Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. The property coverage pays for damage to or theft of your car. The liability coverage pays for your legal responsibility to others for bodily injury or property damage. Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
Why do you need Auto Insurance?
It’s the law. Most states require its drivers to carry a minimum amount of car insurance in the form of liability coverage or financial responsibility bonds. If you get caught without it, can result in fines and the suspension of driving privileges.
Plus, just because you’ve never had an accident doesn’t mean you never will. Accidents are just that: accidents. You don’t know when or if they’ll happen. But they do every day. Get caught uninsured and you will pay for all repairs out of pocket on top of the ticket you’ll get for not having insurance.
Things to remember:
The coverage you are required by law to buy (liability insurance) typically is the most expensive. But you can help offset that cost by having a higher deductible. You’ll pay if there is an accident but you’ll save if there isn’t one. Also, shop around different companies to find your lowest rate. They all use different factors to calculate your rate and you may find a better rate with a different company.
So before you head out to Kim’s Nissan to pick out your new or used car, make sure you figure out your insurance. You’ll need the information from your company before leaving the lot with your car.