Why do you need car insurance?

It goes without saying that you need auto insurance in order to protect yourself and other drivers on the road, but you really need car insurance because it is required by law. Every state requires drivers to carry minimum levels of insurance coverage except for New Hampshire and Virginia, and you could face fines and penalties for driving without insurance. Get coverage today with free quotes from our comparison tool below.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Jun 4, 2021

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When you buy a car, one of the first necessary purchases is car insurance. Looking for cheap car insurance quotes can be found on online comparisons. You might ask yourself, “Why do you need car insurance?” but it is very important. Car insurance is considered a necessity by most people who own vehicles. Visit out FREE car insurance quote portal by putting in your ZIP code!

If you want to limit your personal financial risk, buying an auto insurance policy is essential. It is important before buying a policy that you do a comparison quote. Put your zip code in above and have a FREE car insurance quote comparison! There are a few reasons that you need to buy an auto insurance policy.

  1. Abide By State Laws
  2. Limit Financial Liability
  3. Protect Your Own Investment
  4. Avoid Inconvenience

Abide By State Laws

One of the most obvious reasons to buy car insurance is so that you can be in line with laws in your state. Every state in the US has laws about car insurance requirements. You have to at least buy a liability insurance policy.

With this type of coverage, your insurance company will pay for the damages caused by you while driving your vehicle.

States have minimum amounts of coverage and the minimum amounts vary. When buying a policy, your insurance agent will be able to give you the minimum limits for your state so that you buy the right type of policy.

If you are buying a policy online, you should look up the minimum coverage limits for your state so that you know exactly what to get. Otherwise, you may not have enough liability coverage on hand when you get into a wreck.

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Limit Financial Liability

Another reason that you may want to purchase auto insurance is so that you can limit your own personal financial responsibility. When you are in a wreck and its your fault, you will be responsible for paying for the damage to the other driver and his vehicle.

If you don’t have auto insurance, this could result in you having to pay thousands of dollars of your own money out of pocket. When you have an auto insurance policy, it will pay for the medical bills of the other driver as well as any damage that you cause to his property.

If you are sued by the other driver, the auto insurance policy will pay for the legal fees and the damages up to your policy coverage limits.

Since the auto insurance company will only pay up to your coverage limits, it is important to make sure that you choose high coverage limits. Without the right limits in place, you may have to come up with additional money out of your own pocket.

Typically, it doesn’t cost that much more per month to get larger liability insurance limits. By taking the initiative to get these higher limits, you limit your own financial liability and protect your personal assets from being taken in a court settlement.

Protect Your Own Investment

Buying auto insurance can also help you protect your own investment. While liability insurance is required by state law and helps limit your personal financial liability, collision and comprehensive auto insurance can ensure that the investment in your car is taken care of.

With collision auto insurance, the insurance company pays to repair or replace your vehicle if you are at fault in an accident. Without this type of insurance, you would be on your own to pay for your vehicle if it were totaled.

If you use an auto loan to purchase your vehicle, the lender will most likely require you to buy collision and comprehensive insurance coverage. Without these types of coverage, the lender is also at risk if your car is damaged. The lender wants to make sure that your car is still worth something since it loaned money against the vehicle.

While collision protection helps you when your car is damaged in a wreck with another vehicle, comprehensive protects your car from other random acts of damage. Almost any other type of damage to your vehicle can be covered with this option.

For example, if your car catches on fire and is destroyed, the comprehensive coverage would pay for the damage. If your vehicle is stolen and never recovered, the comprehensive coverage would kick in and reimburse you. It also pays for damage that occurs from floods, lightning strikes, wind, tree branches, animals and vandalism in most cases.

One of the nice things about getting comprehensive coverage is that the deductible is often lower than what you pay with collision coverage. Since these types of damage are generally not your fault, the amount of money that you have to come up with out of pocket is not affected. Visit the FREE car insurance quote finder by putting in your ZIP code!

Avoid Inconveniences

Another reason that you may want to invest in auto insurance is so that you can limit the amount of inconvenience in your life. When you wreck your car, it can be a major inconvenience. You may not have another vehicle to use while your car is being repaired or replaced. You still need to get to work and take the kids to school. If you purchase the right type of auto insurance policy, you can be sure that you’ll have a rental car waiting on you after a wreck.

Many auto insurance policies provide rental car reimbursement coverage. This means that the insurance company will pay for you to use a rental car while your car is in the shop. If your car is totaled and you are shopping for a new car, your insurance will typically pay for a rental car for a few weeks while you’re looking for a car to buy.

Without this type of coverage, you would have to come up with the money to pay for a rental car of your own pocket. Many people don’t have the hundreds of extra dollars that it would take to pay for a rental car sitting around in the bank, so this can be a life saver.

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Because of the many advantages that auto insurance provides, it makes sense to buy a policy as soon as possible for your car. Before you simply go out and buy policy from the first insurance company you see, it usually works to your advantage to shop around a bit. You can check with local insurance agents and get online to get quotes on insurance policies.

When comparing quotes, make sure that you are getting a policy with all of the features that you want to have. For example, some policies don’t come with rental car reimbursement for comprehensive coverage. You’ll need to specify all of the options that you want in a policy when shopping. After you put your ZIP code in and receive FREE car insurance quotes, you can make an educated decision about your policy!

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