The importance of motor vehicle insurance is sometimes lost on people with an impeccable driving record and with those who do not wish to shell out thousands of dollars on annual fees. As an insurance professional with over 20 years of experience in the field, I would like to give an informed explanation of why we need car coverage and other forms of insurance.
First and foremost, we purchase car insurance not only to protect ourselves but also the people we might harm in the unfortunate case of a car accident. Every state, with the exception of New Hampshire, has in place mandatory insurance policies for car and motorcycle drivers. However, these policies may vary depending where you live and the kind of car you drive. States enforce insurance policies in order to protect citizens from extreme financial loses and damages caused by vehicle and motorcycle accidents. With insurance policies intact, these loses are greatly minimized for the drivers who do not have the resources to cover medical bills and pay to repair physical damages out of pocket. By making monthly payments and annual premium dues, insurance companies are able to absorb a good portion of damages on behalf of their customers. Unfortunately, for many drivers insurance fees tend to increase after a car accident.
Another great reason to purchase car insurance is the high possibility of actually being part of a car accident. Those who have been unfortunate enough to experience this burden are all too familiar with the financial strains that follow an accident. It is important for drivers to be able to protect not only themselves, but also to be financially responsible for the other parties involved in the case that the accident is your fault. Insurance allows people to pay off damages and hospital bills, that would otherwise be too expensive to take on alone.
One final consideration to take into account when discussing the benefits of purchasing insurance is the ability to protect your assets such as, your car, home and bank savings. Besides buying a house, cars are one of the biggest investments you will make in your lifetime. We will find ourselves paying off car payments for many years, which is why it is extremely important to protect such a significant asset. In many cases, banks require full collision coverage in order to secure full payment loans in case of an accident.