Why Do I Need Auto Insurance?

Vehicles can be expensive to repair and can cause a lot of costly damage when involved in an accident. Auto insurance helps protect your finances from the fallout of accidents and other claims.

The Basics

Auto insurance, like all insurances really, is something you pay for and hope you will never need to use. However, having insurance can protect you financially from the costs of replacing or repairing vehicles, paying medical costs, and more. Consequently, having auto insurance is generally a good idea and is usually required.

Accidents Happen

No matter how careful we are, accidents do happen. When those accidents involve vehicles, major physical and financial damage can occur.

To illustrate, imagine the accident pictured was 100% your fault. Let’s further imagine it destroyed several vehicles and also sent several people to the hospital. Bottom line: you could easily be legally responsible tens of thousands of dollars of damages.

Fortunately, most people will never be the cause of an accident of this magnitude or be financially responsible for the level of damages it could cause. Still, even minor fender benders, which happen all the time, can cause the at-fault party to be financially responsible for substantial damages. Auto insurance can help protect us from such financially damaging situations.

More Than Just Accident Coverage

Accidents are a common reason for auto insurance claims, but they are not the only negative financial event from which auto insurance can help protect us.

Whatever the cause, damage to a vehicle can be costly to repair, and auto insurance can help protect our finances.

You May Not Have a Choice

Purchasing auto insurance may not be optional. Most states require drivers to have at least minimum levels of auto insurance (minimums vary by state). Also, if you lease or finance your vehicle, your lender may have minimum insurance requirements you must maintain as part of the financing agreement.