Ruchi Gupta

Reasons Why a Car Insurance Is Not Just A Legal Requirement

A car insurance is a legal requirement. However, it is not the only reason why people spend thousands of dollars every year on it. Accidents can be costly and cause unnecessary pain, thus the need to ensure one has some layer of protection when it comes to finances. Car insurance is designed to alleviate some of the costs that one might incur, if the unfortunate occurs.

Protect Finances

Even the best drivers do cause accidents occasionally. When the inevitable happens, a car insurance comes in handy in covering the costs of property damages, damage to other vehicles or any human injuries that might have come into being as a result. Law tasks the person who causes an accident with the responsibility of ensuring all the costs arising from the accident are catered for.

Total Loss Compensation

Depending on how severe an accident it, it may be impossible to recover a car to its initial position. There are car insurance covers that cover the costs of a car being replaced, if it cannot be recovered. Regardless of who caused the accident one can be assured a car worth the one that was damaged in an accident.

Increase Credit Worthiness

Car insurance does increase once creditworthiness, when it comes to borrowing money. Insurance companies are usually hesitant to provide people, without car insurance, a new policy, given that they are considered ‘high-risk drivers’. Car insurance also allows one to continue paying their monthly payments in case of a car loan when involved in an accident. In contrast, a person without a car insurance will have to cater the costs of a new car, in addition to paying monthly installments to a car already wrecked in an accident.

Legal Protection

In addition to being a legal requirement, auto insurance provides a certain degree of legal protection. For instance, you can be sued by a third party, even if you did not cause an accident, if you don’t have a car insurance. Auto insurance, in this case, acts a buffer against legal claims. If you are pulled by the police most of the time they will ask for a driving license and insurance information. To avoid any confrontation that might be a waste of time, it is always good to be prepared. A car insurance will also save you a lot of time. It is the job of the insurance company to meet with the other driver’s insurance company, to resolve any claims arising from an accident.

Protect Passengers

If you are in the public transport business a car, insurance is essential. Car insurance caters for medical payments and personal injury protection for the passengers in case of an accident. Coverage may also help pay for hospital visits as well as doctor bills and surgery costs. In addition, a car insurance could also cover for your medical costs if a person who does not have a car insurance hits you. With the right coverage, an auto insurance can help cater for things like funeral costs dental work and nursing care rehabilitation.

Non-accident Protection

Unknown to many is that auto insurance is not just for accidents that happen on the road. Coverage at times goes overboard and caters to things like a car being stolen or vandalized. Protection may also cater for damages caused by Mother Nature in case of a mudslide, Hurricane or earthquake. Having a car insurance goes beyond full filling the legal requirement. In addition to protecting your car and third parties, it ensures peace of mind while one is on the road.