Picture this: you’re driving home late at night in the middle of the winter. It’s cold and slick, and the forecast calls for snow and ice. Conditions couldn’t be worse.
Suddenly, your tire slides. Your vehicle skids out of control on Carrie Underwood’s famously referenced ‘thin black sheet of glass’. Another car blares its horn at you, and you both brace for impact.
In the aftermath, you find yourself buried in repair and hospital bills. To make matters worse, the other party involved in the crash is suing you for damages done to them.
From this scenario, the answer to the question “Why is car insurance important?” should be plain. Need more convincing? Here are a few reasons why car insurance is important to you and to the state.
It’s the Law
“Why is car insurance important?” you may ask. The first reason is simple: it’s the law.
There are only two states in the United States (Virginia and New Hampshire) that don’t require drivers to carry auto insurance. Additionally, only Florida allows drivers to opt out of Bodily Injury liability insurance.
If you’re caught driving around without insurance, the costs can be severe. The punishments you face vary from state to state but can include fines, tickets, and license suspension. You could even wind up having your car impounded.
It’s not worth the risk.
It Covers Your Assets
If there’s one phrase everyone in the insurance industry knows, it’s “CYA: Cover Your Assets”. This isn’t just a pithier, more office-appropriate way of saying the common variant of the phrase. It refers to the literal purpose of insurance itself.
Let’s return to the example above, where you and another driver collided on an icy road, and the other driver sues you for damages. If you carry insurance, your insurance company and theirs will try to hash things out with a settlement before a personal injury attorney comes knocking. If you don’t, the other driver can come straight for your assets.
Your home, your car, any savings, stocks, or bonds you might have can all be seized in an effort to pay your settlement costs. You can also, depending on the state, face wage garnishment.
That ‘too expensive’ auto insurance premium seems like a drop in the bucket compared to losing every single thing you own, doesn’t it?
Helps With Expenses
The importance of insurance in covering your assets cannot be understated. However, this coverage doesn’t just protect you from people going after your stuff. It also helps you and your passengers with expenses related to a car crash.
Collision and comprehensive coverage are two important auto insurance coverages that many folks choose to go without to save a few dollars. It’s easy to see why. You’re careful when you drive, so you don’t need that kind of coverage.
Here’s the thing: even if you drive carefully, others on the road don’t. Getting into an accident with those other, less careful drivers can still damage your car. When the average car repair cost after an accident is far more than $0 (the lowest possible deductible you can choose for most insurance policies), the extra premium you pay on your insurance won’t seem so bad by comparison.
That’s not even getting into potential medical expenses for you and your passengers. Health insurance policies may not cover or offer enough coverage to handle paying for your injuries post-accident. Even minor fender benders can have long-lasting medical consequences, to say nothing of the brutal injuries more severe car accidents can cause.
Consider the cost of the average stay in an American hospital and the general state of our healthcare system. Do you want to be on the hook for thousands, if not tens of thousands of dollars in medical bills?
Offers Peace of Mind
Getting involved in a car accident is a massive source of stress. From the moment of impact to the repairs and medical expenses and the aftershocks, it can take a while to recover. Car accidents are the primary cause of PTSD in the civilian population, with good reason.
Whether or not your car insurance policy will cover therapy relating to the accident, having insurance will still help your mental state in the aftermath of a disaster. You won’t have to pester the other parties involved for payment of your expenses, as your insurance company will handle that for you.
Need a tow to a nearby repair shop? Your policy would have coverage for that. Don’t have another car you can use and need one to drive while you wait on yours to finish getting repaired? Your insurance can have it covered.
Once you file your claim with the insurance company, much of the pressure that would otherwise rest on your shoulders goes away. This means that you can rest assured knowing that, whether the mistake was yours or another driver’s, one mistake won’t lead to utter financial ruin.
Why Is Car Insurance Important? Let’s Review
There’s a lot to consider here, so let’s review. “Why is car insurance important?”
Car insurance can save you from losing everything you own in the event of an accident. It can also help you navigate your expenses, repairs, and other bills in the aftermath, saving you time and stress. With all this in mind, rather than questioning the importance of car insurance, you should walk away wondering why you don’t already have it.
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