Auto Insurance – What It Is And Why You Need It

If you have a car, having insurance for it is not given as an option, you really need one, legally. This type of insurance protects you from financial problems and potential money loss if ever you figure in an accident.

Car insurance is basically a contract between you and an insurance company. You can choose a yearly, quarterly or monthly scheme of payment for premiums and the coverage of insurance will be stated in the policy you will be handed. Premium payment amount depends on what car you have and the coverage you would like to avail. Nevertheless, car insurance should cover your property (your vehicle), liabilities (damage to the other car if you were found at fault), and medical expenses for both parties.

When your car gets damaged through no fault of your own, like in cases of vandalism, or theft, the car insurer will pay for the repairs or the whole car in case of theft or total wrecks. On some cases, your car will be replaced by a brand new car of the same year, make, and model.

If you get into an accident where you cause damage to another person, another vehicle, or any property, the insurer will pay the aggrieved party.

In cases wherein the accident is pretty intense and may cause injury to both parties, and it was your mistake, medical coverage pays for all procedural tests such as x-rays and scans, treatment, rehabilitation, even lost wages due to inability to go to work, and in more unfortunate cases, funerals.

Just imagine if you do not avail of car insurance, you would not be able to get any of the benefits mentioned above. You will be paying your liabilities out of your own measly paycheck.

If you are the aggrieved party, you may actually be let off lightly. If for example, some guy smashes into your vehicle from behind, and he fortunately has at least basic coverage, his insurance company will pay for the damage to your vehicle and hopefully for your medical needs as well. But if both of you are found to be at fault, then his insurance company will cover his damages, while you have to pay for your own.

State laws vary on how they would view non – compliance with insurance laws. Nonetheless, all of them will undoubtedly include large fines, at least driving license suspension and/or registration suspension, or they could even totally revoke these. In some states, jail time is a big possibility because you are endangering lives and properties of other people, not to mention yours too.

Car insurance policies generally do not include auto maintenance services and if you do not have it, then you had better make sure that your car is in mint condition. A few possible accidents can be ticked off your list if you keep your car running smoothly. Various auto service centers offer discounts and cash rebates on services and auto parts if you carry a gas credit card with you.

Nonetheless, it would be a really unwise decision on a vehicle owner’s part if s/he chooses not to get car insurance. Accidents can be prevented but not totally inevitable and you should always safeguard yourself for this possibility.

See: gas credit card

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