Maybe you’ve heard someone say, “you have to get car insurance one day.” This should be taken literally because you actually have to have car insurance. Carrying a certain amount of general liability car insurance is a requirement in 90% of the United States. As any law-abiding citizen, you purchase at least the minimum amount of car insurance that your state requires. Of course, there is a reason why we have such laws regarding car insurance in the first place. This post looks at exactly why we have and need car insurance. It goes beyond “just because.”
Table Of Contents
1. Legality of Car Insurance
Car insurance is state rather than federally mandated. All laws regarding car insurance are dictated by the states and their DMVs. Every state, except Virginia and New Hampshire, has its own minimum requirements for car insurance. These are in the form of liability and property damage coverage. States split it up into three different coverage amounts –personal liability per person, personal liability per accident, and property damage. This accounts for damage that you cause to another driver, their passengers, and their vehicle. Every state sets these coverages differently. An example would be that drivers in Illinois must carry at least $25,000 in liability per person, $50,000 in liability per accident, and $20,000 in property damage. This would make up their general car insurance. Inversely, full car insurance with comprehensive and collision insurance isn’t required by state laws. The law does not care if your own car is fixed; they only care for the damage and injuries that you have caused. Without insurance, you can be sued for damages. At the same time, states may also revoke your driving privileges along with fines and even jail time.
2. Paying For Damages And Injuries That You Cause While Driving
This is a legal responsibility for the majority of drivers in the United States and why states have such laws as the ones we just went over. Outside of the legal requirements, the driver you hit can press charges or file a lawsuit if you don’t have the proper car insurance coverage. Likewise, if you were the victim of a car accident, you would want the at-fault driver to pay for the damage they caused. These bills are intensely steep, often stretching over $100,000 for the uninsured driver. At the same time, the drivers around you are also held to the same standard.
3. Paying For Damages And Injuries Regardless of Driver Fault
While full car insurance isn’t required and can cost more than basic car insurance, it can go a long way in protecting you financially when you damage your own car. As previously mentioned, there are no laws saying that you must have insurance for damage that you caused to yourself and your car. Collision car insurance covers damage to your car in an accident that you caused. Comprehensive car insurance covers damage caused to your car while it is parked or not in use. For a lot of drivers, broad car insurance is worth it in the long run.
4. Financial And Asset Protection With Car Insurance
This is no exaggeration; a fender bender that you will have to cover on your own without car insurance can result in you losing major capital. Some people have reported that such accidents cost so much that they couldn’t even afford their homes. If you can’t afford the cost of damage, your assets can be seized by the driver(s) you injured or whose car you damaged. Car insurance can create a reliable buffer zone between how much you owe for the damages and your assets. Again, it’s best to choose coverage limits well above your state’s minimum requirements, as the minimum amount alone isn’t enough to fully cover such damages.
5. Car Insurance Protects Your Passengers And Others Who Drive
Car insurance policies also have protection for any passengers in the car with you at the time of the accident and anyone who was driving your car with permission or as a rider on your policy. This is especially helpful for drivers with SUVs that regularly drive multiple people. Another reason to get car insurance is if anyone else in your household uses your car without your consent, they will be covered by your car insurance. Auto coverage follows the car rather than the driver. In the end, having car insurance provides peace of mind for everyone in the car. That is actually helpful for a driver’s mental health when they drive. They can focus on the road as opposed to all the terrible and expensive things that can happen if driving without car insurance.