
You may think that auto insurance is simply a way to protect your car—and while that’s true, it also saves you, your passengers, and other drivers on the road. No matter what state you live in, it’s likely that you’re required to have some form of auto insurance.
Here are ten ways auto insurance protects you, your car, and others on the road. Once you understand why insurance is essential, we can help you find the best car insurance companies for your needs.
Law requires Auto Insurance in the Majority of States
One of the main reasons that auto insurance is so important is that it’s required by law in most states. If you drive without auto insurance, you could face steep fines and even have your license suspended or revoked.
Protects Your Car
If your car is damaged in an accident or by a covered event (like a tree falling on your car), your auto insurance will help pay to repair or replace it. You will be required to prove the damage was caused by an allowed incident, but once you do, your insurance company will do the rest to get your car repaired.
Liability Coverage
If you’re responsible for an accident, your auto insurance can help pay for damages to other people or property up to your policy limits. This includes medical bills, lost wages, or repairs to someone else’s car. Some states even require liability insurance so that if you cause an accident, there’s some financial protection for the other driver involved.
Uninsured & Underinsured Motorist Coverage
Even if the other driver has insurance, there’s a chance that it might not be enough to cover all the damages from an accident they cause. If this happens, uninsured/underinsured motorist coverage kicks in and helps cover the costs up to your policy limit. In some states, this coverage is mandatory.
Personal Injury Protection and Medical Payments Coverage
Medical payments or personal injury protection (PIP) can help cover the cost of any medical treatment resulting from an accident—regardless of who was at fault. This can include hospital stays, ambulance rides, surgery, and more. The coverage limits vary by state, so check with your insurer ahead of time to see how much protection you have.
Pet Injury Coverage
Did you know that some auto insurers offer pet coverage? If your dog or cat is injured in an accident while riding in your car, this coverage helps pay their veterinary bills and other related expenses (like boarding during recovery).
Rental Car Reimbursement
Have you ever been in an accident and had to rent a car while yours was being repaired? That rental car can get pricey—but luckily, rental reimbursement coverage can help reimburse you for the cost of a rental vehicle (up to a specific limit) while yours is out of commission.
Towing and Labor for Repairs & Roadside Assistance
Breakdowns happen—but when they do, roadside assistance can come to the rescue by providing things like gas delivery, jump-starts, and tire changes so you can get back on the road again quickly (and without having to shell out a lot of money). Did you know that most roadside assistance programs include helping you change a tire or bringing you a gallon of gas to get you to the next station if you’ve run out?
Custom Parts and Equipment
If you have custom parts or equipment in your car, your insurer will usually help cover the cost of repairing or replacing them if they’re damaged in an accident. This is only if you’ve adequately reported the value and purpose of the equipment.
GAP Coverage
GAP coverage is designed to help pay off your loan or lease if your car is totaled in an accident and you owe more than its Kelley Blue Book value.’ This coverage is typically only required if you finance or lease your vehicle, but it’s still worth considering if you want extra peace of mind on the road.
New Car Replacement
Have you ever heard of new car replacement coverage? If not, it’s pretty simple: if your brand-new car is totaled in an accident within the first few years of ownership, your insurer will replace it with a brand-new one (rather than giving you the depreciated value).
Not all insurers offer this type of coverage, but it’s worth considering if you plan to buy a new car soon.
Bonus – Rideshare Coverage
Are you a Lyft or Uber driver? If so, you might want to look into getting rideshare coverage because most personal auto insurers won’t cover damage when you’re using your non-commercial vehicle for business purposes. Rideshare coverage helps fill this gap.
Bonus – Protect Your Budget
One of the best things about car insurance is that it can help protect your budget in case of an accident.
If you’re involved in an accident, and your car is damaged, repairs can quickly add up—but with the right insurance coverage, you don’t have to worry about footing the bill. Most insurers offer comprehensive and collision coverage, which helps pay for repairs (or the replacement cost of your car) if you’re involved in an accident.
This can be a huge relief when you’re already dealing with the aftermath of an accident, and it can help keep your finances intact. So if you haven’t already, check out what types of coverage are available to you and see how they might help protect your budget.
How to Find the Best Rates
1. Shop Around
One of the best ways to get the best rates on car insurance is to shop around. Compare quotes from different insurers to find the best deal for you.
2. Bundle Your Policies
Another way to save money on car insurance is to bundle your policies. Many insurers offer discounts if you bundle your auto insurance with your homeowner’s or renters’ policy.
3. Pay Your Bill In Full
Paying your bill in full can also save you money on car insurance. Many insurers offer discounts for customers who pay their premiums in full and on time.
4. Raise Your Deductible
Raising your deductible can also help reduce your premiums but ensure you have enough savings set aside to cover the cost if you need to file a claim.
5. Drive Safely & Maintain a Good Driving Record
One of the best ways to keep your rates low is to drive safely and maintain a good driving record. Insurers discount drivers with safe driving records and don’t frequently file claims.
Perfect Coverage
As you can see, there are a lot of ways that auto insurance can protect you, your car, and others on the road. Whether you’re looking for basic liability coverage or something more comprehensive, an auto insurance policy is perfect for you and your needs.
So, don’t wait until it’s too late to get covered; you’re better safe than sorry when the worst comes to pass.