There are so many auto insurance providers out there that it’s sometimes hard to keep them straight. They constantly vie for your attention and business through a series of increasingly outlandish ad campaigns, and they know they’ll at least get some people because it’s a requirement for drivers in America. For one reason or another, many people drive without insurance on their car—a foolish oversight, but an all too common one. Your financial safety can depend on this sole fact. You’ll save yourself a lot of money and heartache in the event of an accident if you’re insured. If you’re one of the many who has burning questions about the nature of auto insurance, you’ve come to the right place.
What is auto insurance?
It’s insurance that is purchased for any kind of road vehicle, be it a car, motorcycle, truck or anything else that travels by road. Should you be involved in an accident in your vehicle, auto insurance will help mitigate some of the many costs associated with it. You pay what’s known as a premium (which can be monthly or annual) to the insurance provider, who in turn will pay most (or all) of the costs associated with the accident and/or vehicle damage. Sounds much better than paying for the repairs to your vehicle (and the other vehicle), doesn’t it?
Most states require a minimum amount paid towards an auto insurance premium to ensure that all drivers are insured to some degree. Just because the state requires that you pay at least a certain amount doesn’t mean that it’s the most you should pay—many drivers choose to pay more to further protect themselves in the event of an accident. The amount you’ll pay for a premium depends on a few stipulating factors:
- · Your age
- · Your gender
- · How many years of driving experience you have under your belt
- · Your accident history
- · Other factors depending on the insurance provider
If you have a poor driving record—lots of accidents, points on your license or several tickets—your premium will likely be higher than it would for someone with a clean record.
What types of auto insurance are out there?
There is insurance available for any vehicle that travels on the road, so that includes cars, motorcycles, trucks and other forms of motorized transport. It goes by many different names:
- Vehicle insurance
- Motor insurance
- GAP insurance
- Car insurance
These names all mean relatively the same thing, but the fact that there are several of them shouldn’t detract from the fact that it is a very important investment in your financial safety. The costs may be different depending on the type of vehicle you drive and the other aforementioned conditions, but there is certainly a plan out there that suits your needs.
Who needs auto insurance?
This is a no-brainer—everyone who drives a vehicle needs auto insurance. Not only is it illegal to operate a motor vehicle while uninsured, it’s foolish and a mistake could end up being extremely costly. When these costs are so easily preventable, it’s hard to understand why someone wouldn’t just pay the premium up front to save themselves the possibility of a financial disaster in the event of an accident. Even if you are a safe, experienced driver with no accidents or moving violations, you still need to have auto insurance to protect yourself in the event that something goes wrong, even if it is not your fault.
What are the benefits of auto insurance?
The most obvious benefit of obtaining auto insurance is that you won’t be responsible for the majority of monetary costs that result from an automobile accident. It also allows you to legally operate a vehicle, which is something that many people overlook. If you simply get the state required minimum level of coverage, you’ll be able to legally drive your vehicle (other conditions equal). Even though the premium is an upfront cost that drives some people away, the peace of mind it will afford you is priceless, not to mention the financial security you receive by simply taking part.
Some of the benefits go beyond your personal finances—society as a whole benefits from the presence of auto insurance. The fair legislation of accident responsibility and punishments depend on insurance, as do the peace of mind of other drivers and the economic safety that auto insurance affords to all drivers.