Reasons You Need to Carry Auto Insurance
Reasons You Need Auto Insurance Liability Insurance Every US state requires proof of financial responsibility in order to drive.
For almost all of us, this means we need to carry the required minimum liability insurance.
So the first reason you need to carry coverage is because your state law requires it.
This law is in place to protect the other guy.
Your liability policy makes sure that any damages your driving does will get paid.
Of course, it also protects you because these damages could ruin you financially if you had to pay them out of your pocket.
If you are caught driving without proper insurance, and especially if you have an accident, you may have to add legal troubles to your woes.
Collision and Comprehensive Insurance Do you still owe money on your car? If so, your lender probably requires you to carry a lot more coverage than just minimum liability insurance.
You probably also need to have collision and comprehensive coverage.
This is how the lender can be sure to get their money back in case the car is wrecked.
This coverage also protects you.
If you are judged to be at fault when your vehicle is damaged, this coverage will help pay to repair your car, replace it, or pay off a loan.
GAP Insurance Have you ever had an insurance company declare your vehicle a total loss? Sometimes they will do this, and they will not pay you more than the book value of your auto.
It does not matter if you owe more than that amount of money on your loan either.
There is a policy you can purchase, called GAP insurance, which has been designed to remedy this problem.
It covers your vehicle for the loan value of the car.
So it will pay the amount that is left over after your insurer pays the book value on a total loss.
Since many people owe more on their vehicles than the insurer thinks the vehicles are worth, this type of coverage can provide some real security.
For example, many experts tell us that the minute we drive a new car off of a dealer's lot, that auto has lost 20% of its value.
For a $20,000 car, that is $4,000! Many new vehicles cost a lot more than $20,000 these days.
Why Else Do You Need Car Insurance? The real reason that you purchase an auto insurance policy is not to satisfy a state law or protect your lender.
You buy it to protect your own investment and finances.
If you have an accident, your insurer should help you handle the whole process of getting things back in order.
Other people's damage claims can get paid, your car can get repaired, and you may be entitled to some other helpful benefits like a temporary rental or legal help.
Since your insurer is covering your vehicle, they have an interest in protecting you.
If you have ever had an accident, you know how important it is to have a good insurance company behind you.
So the reason you really purchase a good vehicle policy is to protect yourself.
For almost all of us, this means we need to carry the required minimum liability insurance.
So the first reason you need to carry coverage is because your state law requires it.
This law is in place to protect the other guy.
Your liability policy makes sure that any damages your driving does will get paid.
Of course, it also protects you because these damages could ruin you financially if you had to pay them out of your pocket.
If you are caught driving without proper insurance, and especially if you have an accident, you may have to add legal troubles to your woes.
Collision and Comprehensive Insurance Do you still owe money on your car? If so, your lender probably requires you to carry a lot more coverage than just minimum liability insurance.
You probably also need to have collision and comprehensive coverage.
This is how the lender can be sure to get their money back in case the car is wrecked.
This coverage also protects you.
If you are judged to be at fault when your vehicle is damaged, this coverage will help pay to repair your car, replace it, or pay off a loan.
GAP Insurance Have you ever had an insurance company declare your vehicle a total loss? Sometimes they will do this, and they will not pay you more than the book value of your auto.
It does not matter if you owe more than that amount of money on your loan either.
There is a policy you can purchase, called GAP insurance, which has been designed to remedy this problem.
It covers your vehicle for the loan value of the car.
So it will pay the amount that is left over after your insurer pays the book value on a total loss.
Since many people owe more on their vehicles than the insurer thinks the vehicles are worth, this type of coverage can provide some real security.
For example, many experts tell us that the minute we drive a new car off of a dealer's lot, that auto has lost 20% of its value.
For a $20,000 car, that is $4,000! Many new vehicles cost a lot more than $20,000 these days.
Why Else Do You Need Car Insurance? The real reason that you purchase an auto insurance policy is not to satisfy a state law or protect your lender.
You buy it to protect your own investment and finances.
If you have an accident, your insurer should help you handle the whole process of getting things back in order.
Other people's damage claims can get paid, your car can get repaired, and you may be entitled to some other helpful benefits like a temporary rental or legal help.
Since your insurer is covering your vehicle, they have an interest in protecting you.
If you have ever had an accident, you know how important it is to have a good insurance company behind you.
So the reason you really purchase a good vehicle policy is to protect yourself.
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