Why is Car Insurance Important?

If you're wondering why car insurance is important, here are just a few reasons. Car insurance protects you in an accident, protects others in the car with you, and can protect family members using your car.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jun 4, 2020

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Here's what you need to know...

  • It is crucial that you possess car insurance so that you can protect yourself in the event of a car accident
  • Benefits of car insurance are that it protects others who are riding in your vehicle at the time of the accident, as well as any other people who may have been involved
  • The older the company is, the more established they are, and the better service they will typically provide

Is it necessary to buy car insurance? Why is having insurance important? One of the most necessary types of insurance plans that meet the needs of most people is auto insurance. Unfortunately, it is a necessary evil, and people don’t feel that they really have to have it until they’re in an accident.

Why is car insurance mandatory? What is the importance of car insurance? Car insurance is there to protect other members of the family who may also use your vehicle.

Coverage is usually on a per-vehicle basis, so anyone responsible for the vehicle at any given time is typically covered.

But you can get personal coverage, as well, so if you are riding in another person’s car and it becomes disabled for some reason, you are still covered, even if you are not in your own vehicle.

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Know the Basics

What does auto insurance cover? Many different types of car insurance policies are available depending on the type of coverage you want. For example, if you want full coverage, you can opt to protect yourself against physical harm, fire, and theft.

The insurance broker or agent through which you decide to purchase your insurance can help you choose the appropriate policy for both your budget and your own personal needs.

Your payment is the insurance premium. The premium can be paid monthly, quarterly, semiannually, or annually, depending on the payment arrangements you have made with your insurance company.

Many factors determine the amount of your insurance premium including:

  • Occupation
  • Age
  • Driving history
  • Sex
  • Distance you drive
  • Type of car you drive

For example, if you drive an expensive luxury car, you can count on paying a larger premium than someone who drives a low-cost, economy vehicle or sports car.

Your insurance deductible is the amount of money that you must pay should you become involved in an accident. While your insurance company will pay to have your car repaired, you must be prepared to pay the deductible first.

Conversely, many car insurance companies will simply subtract the deductible from the amount that they are prepared to pay. This makes it easier should you not have the deductible on hand at the time.

If the accident was not your fault but rather the fault of the other driver involved in the accident, you may not be responsible for paying your deductible; it may be the responsibility of the other driver’s insurance company.

Auto insurance is especially important for commuters or anyone who uses their vehicle on a daily basis. From teenagers to senior citizens, if you drive your car regularly, auto insurance is a must. 

However, just as auto insurance is an important necessity, it is equally important to do your research in order to find a company with both full coverage and the reasonable rates.

The fastest and most effective way to do your research today is via the Internet, especially since you can read reviews of satisfied and dissatisfied customers, while simultaneously reading about any services and guarantees offered to the public.

By doing this, it will be easier to select an auto insurance company that is ideal for your needs.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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How to Engage the Best Company

Investigate and get advice from various top notch companies that provide general auto insurance. In order to shorten your searches, you can gather information from a top insurance company, rather than from a bunch of mediocre companies.

Be sure to select the company that has a large range of products to choose from.

The length of time the insurance company has been in business is equally important and should be considered as a factor when selecting the company that’s right for you.

The older the company is, the more established they are, and the better service they will provide, having the experience to deal with a diverse group of customers over the years.

Once you have received auto insurance quotes from various qualified and reputable companies, you will find it easier to determine which company is best for you.

Enter your zip code now to compare car insurance quotes!

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