Have you been driving without car insurance? If you have, you might be putting yourself at risk of high repair bills, having your license suspended and even jail time if this isn’t your first time getting caught without coverage. While some form of liability coverage is a requirement to drive in nearly every state, the benefits of car insurance go far beyond simply keeping you out of trouble with the law. Read on to learn more about why you should get car insurance today if you don’t already have coverage.
The 5 Biggest Reasons you Need Car Insurance
No one wants to think about the possibility of themselves being involved in a car accident. Unfortunately, collisions on the road are relatively common occurrences — each year, about 4.4 million men and women experience a collision that’s serious enough to require medical intervention. Maintaining car insurance coverage can help you avoid thousands of dollars in medical bills and fines in the event that you’re involved in one of these accidents.
You can get an insurance quote and check out your car insurance options at any time.
The following are five reasons why you should never go without an auto policy.
- Pay for Accidents
Do you know how much it might cost to repair your vehicle after an accident — and do you have enough money in your savings account to cover auto body repairs? Contrary to popular belief, even minor fender benders can result in high repair bills. Here’s what you can expect to pay for some of the most common repairs auto body shops see after an accident.
- Bumper damage repair or replacement: $300 to $1,500 (more if your bumper is equipped with sensors or backup cameras that are damaged during the accident)
- Car door damage repair or replacement: $50 to $1,000
- Windshield repair or replacement: $50 to $1,000
- Damage to your vehicle’s paint: $500 to $2,500 (may be even more if you drive a luxury or sports car)
If you’re involved in an accident and you don’t have car insurance, you could be left paying for the entirety of these repairs out of pocket. Those bills can put a serious strain on your household finances, especially if you rely on your vehicle to get to and from school or work. However, if you have auto insurance, you may be able to file a claim with your insurance company to pay for a large portion of the repairs you need to fund.
An important note to keep in mind — if you want protection for your own vehicle following an accident, you’ll need to be sure that you have collision coverage on your auto insurance policy. Collision coverage is not a legal requirement to be on the road, which means that if you purchase state-minimum coverage, you will not be able to make an insurance claim for your own vehicle following an accident. Thankfully, every major auto insurance company offers collision insurance as an add-on coverage. You can easily bundle your state minimum liability insurance alongside your collision coverage without spending hours doing new research on companies in your area.
- Pay for Someone Else Involved in an Accident
The government requires drivers to maintain car insurance to protect themselves from the potentially astronomical costs they would face from other drivers following an accident. For example, if you cause a major accident, the driver that you collide with could potentially sue you for medical bills, the cost of repairs to their vehicles, loss of use and more.
In order to avoid putting this financial burden on individuals and filling the court system with vehicle-related lawsuits, you’re required to have liability insurance. When you accept an insurance settlement in most states, you also waive your right to sue the other driver for damages. This process cuts down on the number of court cases related to collisions, as most people would rather take a check from the insurance company now rather than spend money to hire a lawyer and wait months or even years for the case to close.
- Protect Your Assets
Imagine that you’re involved in a major accident, and you cause $100,000 worth of damage to another driver — a scenario that’s not as crazy as it may seem when you consider both medical costs and vehicle repairs. If you don’t have $100,000 sitting in your bank account, the other driver involved in the accident could theoretically access your assets in order to fund their compensation. The assessment could include your investments, your vehicle and even your home.
When you have liability insurance, you create distance between the amount of money that you owe the victim and your personal assets. While you might not have $100,000 in cash, you could have a large portion of this bill covered by your auto insurance policy depending on your policy limits. This is why it’s always a good idea to consider increasing your liability insurance coverage when you make a major purchase — like buying a home or a new car.
- It’s Required by Law
Of course, the reason why most drivers buy car insurance is because it is required by law to operate a motor vehicle. Almost every state requires you to maintain at least two types of car insurance, including the following.
- Bodily injury liability coverage: Bodily injury liability coverage helps to pay the medical bills of other drivers and their passengers following a collision. For example, if you get into an accident that causes the other driver to break her arm, your bodily injury liability coverage will pay for all or part of the costs.
- Property damage liability coverage: Property damage liability coverage compensates anyone whose property you damage during an accident. For example, if you have a collision with another vehicle, this coverage will help pay for damage to the other driver’s car or truck.
Only two states don’t require you to purchase auto coverage in order to drive — Virginia and New Hampshire. However, even in these states, you can only escape your insurance requirement if you prove financial responsibility in the form of a cash bond or annual uninsured motorist fee.
Keep in mind that neither of these options absolve you from your responsibility to pay for other drivers’ medical and repair bills following an accident — they only allow you to legally drive without insurance. If you live in a state that doesn’t require car insurance, it’s still not a good idea to drive without a policy because you’ll be personally responsible for paying any bills from other drivers following a collision.
- Legal Support
Being involved in a collision on the road can be an incredibly stressful situation, and you may have no idea what to do after even a minor accident. When you have car insurance and you need to file a claim, you’ll have access to representatives who can help guide you in the next steps. Your auto insurance representative may help you cover your bases on a legal level (for example, by helping you document the scene of the accident) as well as file a legitimate claim.
Can Your Insurance Pay for Uninsured Drivers?
You can purchase a type of insurance called “uninsured motorist coverage” that helps you pay for expenses if you’re involved in an accident with a driver who doesn’t have insurance. But, there’s also underinsured motorist coverage, and that falls in the same category because some people buy cut-rate coverage and it isn’t much help to you. Uninsured motorist coverage can help you pay for:
- Lost wages if you cannot work following the accident
- Medical expenses
- Funeral costs
In some states, you are required to have a special type of insurance called personal injury protection (PIP). PIP helps you pay for your own medical bills regardless of who caused the accident. This coverage also applies to drivers who illegally leave the scene of an accident during a hit-and-run. Keep in mind that PIP only applies to your medical bills — your collision insurance, if you have it, handles claims you file to help pay for vehicle repairs.
Does Auto Insurance Offer Extra Benefits?
In addition to the major benefits of having insurance, you might also be able to add extra benefits with your comprehensive coverage, including the following.
Rental reimbursement: Rental reimbursement coverage helps you pay for transportation expenses while your vehicle is repaired or replaced following an accident. You can purchase this add-on coverage from most major insurance providers.
Medical payments: In some states, you can purchase medical payments insurance that helps you and your passengers cover medical bills after a collision. This coverage applies regardless of who caused the accident.
Riders: A number of additional riders beyond these examples can help you pay for special circumstances. Some common riders offered may include first accident forgiveness and depreciation waivers.
Exotic/classic car coverage: Exotic and classic cars can be expensive, especially when it comes to repairs. You can purchase specialty insurance for these types of vehicles that have higher limits on the amount of money you can get in an insurance claim.
Compare Car Insurance Providers
Benzinga offers insights and reviews on the following car insurance providers. You may want to consider beginning your search for coverage with one or more of the links below. Remember, auto insurance carriers use your driving record or driving history, vehicle identification and policy options to set insurance rates.
Frequently Asked Questions
Does it pay to buy insurance?
Yes, it pays to buy insurance — especially car insurance. If you’re caught driving without insurance, you can face fines, have your licenses revoked or suspended and even face jail time. These are only the criminal consequences of driving without insurance. If you’re involved in an accident without coverage, you could face thousands of dollars in bills from the other driver.
What does insurance do?
Insurance helps you pay for damages incurred under a specific set of circumstances. For example, imagine that you cause an accident that results in the driver you collided with incurring $25,000 worth of medical bills. If you have insurance, your insurance company would pay for this bill, less your deductible. If you are involved in this accident without insurance, you’d be responsible for footing this bill yourself.
How much car insurance do I need?
The amount of car insurance you need depends on your circumstances. At a minimum, you need the amount of insurance required by your state. You should also consider buying comprehensive and collision coverage to cover the cost of car repairs or replacement should you get in an accident.