Car insurance is more than just a safety net to protect yourself from legal liability in the event of an accident. The right kind of coverage can help pay for damages to your car, your medical expenses, etc. It’s good to know that, even if you’re at fault, you can be protected in almost any situation with car insurance. Here are some reasons why you need to have an active policy at all times.
To Protect Yourself from Legal Liability
If you happen to cause a serious accident and don’t have car insurance, you could be held liable to pay for damages to other people’s property — not just their cars but also their injuries (if they’re injured). If you don’t have the necessary savings in your bank account to pay them back, your credit score may just take a huge hit, and banks may refuse to give you a loan or credit card in the future.
It Is Mandatory
The laws in each state vary, but states require drivers to at least have minimum auto liability coverage. It’s, of course, best if you increase your liability coverage so you don’t have to pay out of pocket in case you cause a huge wreck. In addition to liability coverage, some states may require you to have additional coverage, like a personal injury plan or uninsured motorist coverage.
Your Lender May Require It
If you are leasing or entirely financing your vehicle, your lender will require you to have comprehensive and collision coverage. Since your vehicle, at this point, legally belongs to the lender or leasing agent, they will require you to have enhanced coverage, so their investment is protected.
Protects You from The Cost of Repairs
Even if you purchased your car outright, it is a good idea to have gap insurance or collision and comprehensive coverage. This way, even if you meet with an accident that damages your vehicle significantly, you won’t have to spend a lot of money to get the car repaired. Without this coverage, you’d have to dip into your savings to get your vehicle fixed.
