Have you ever wondered why is it mandatory for you (and for everyone else) to buy an expensive liability insurance policy? Or have you ever wondered what is the point of spending hundreds of dollars regularly just to keep an vehicle insurance policy that you might need if you get in a car accident?
Even though it would cost you a pretty penny, vehicle insurance is necessary and the long-term benefits that come with it will make spending hundreds of dollars worth it. Auto insurance is a crucial component of the automobile market and the importance of these policies is way more than one can imagine.
But if you are not convinced by this statement and need more information, then that is exactly what this article is about. Here’s why it is so necessary to have an vehicle insurance policy, both the mandatory ones and the optional ones, and how the cost is justified in the long run.
The Mandatory Vehicle Insurance
If you live in any state other than Virginia and New Hampshire, you have to buy liability coverage with the state-prescribed coverage limit if you want to drive a vehicle legally.
Driving without a proper auto insurance policy will not only lead to hefty fines but even getting your driving license suspended and possibly some jail time. But you would be better off if you get caught driving without liability coverage rather than getting in a car accident without one.
Let’s say that you get in a nasty car accident that results in both you and the other driver getting hurt, and both the cars are totaled. Since you are at fault, legally, you should be the one to pay for the cost of medical treatments of the other driver, as well as the cost of repairing the vehicle. Not only the medical bills and repair costs would be enormous, but you need to pay for your medical treatments and repair your car.
Even a minor paint job could cost hundreds of dollars, and the cost of fixing a broken windshield can climb as high as one thousand dollars. If the accident is severe, you might have to shell out almost a million dollars to pay for the entire thing. This excludes the legal costs if the other person sues you.
This is the reason why it is mandatory to have liability coverage with a sufficient coverage limit.
In a car accident, if the accident was your fault, the other driver can claim your liability insurance, and the vehicle insurance company would have to pay for the cost of medical treatments and repairs to the car.
Liability insurance can be a bit expensive, but with a little bit of research, you can find affordable car insurance with great coverage. So not only do you secure yourself financially and legally, but you save some money at the same time.
Personal Injury Protection
If you live in one of the twelve states where having a personal injury protection policy is mandatory, then you have to get it along with liability coverage. The personal injury protection policy pays for the cost of medical treatments needed due to a car accident irrespective of whose fault the accident was. So you can claim your PIP policy even if the driver at fault does not have liability coverage.
There’s no need for an explanation about how expensive medical bills can be. Even a short ambulance ride can cost you hundreds of dollars! Spending hundreds of thousands of dollars on minor medical treatments is common. This is enough to make a personal injury protection plan worth it.
Optional Auto Insurance Coverage
Here are some optional auto insurance coverage plans that you can opt for.
Collision Coverage
Collision coverage will cover the cost of repairs to your car. So if you get in an accident or drive into a tree or a wall, you can claim a collision insurance policy that will pay the enormous cost of repairing your vehicle. Collision insurance covers almost every type of damage to your car that may happen while you are driving it.
From hitting another car, to running into a deer on the freeway, and even damages due to bad roads, collision insurance is worth the price when your car is new, and you want to keep it that way. Only if your car is over 10 years old can you consider skipping collision coverage.
Comprehensive coverage
You never know when nature is going to strike. But when she does, it is a big one. Comprehensive coverage covers the cost of damages to your car caused due to nature’s wrath or even a crowd’s wrath. It covers:
- Fires
- Earthquakes
- Hurricanes
- Hailstorms
- Floods
- Riots
- Vandalism
- Theft
Comprehensive coverage does not cost too much and the fact that it will reimburse you for the entire cost of the vehicle (actual cash value) makes it worth it. Comprehensive coverage will allow you to confidently park your car anywhere, anytime. So if you lack a safe and covered parking space, then this policy is worth the price and even necessary to have.
Uninsured/Underinsured Motorist Coverage
Another great optional coverage is the uninsured/underinsured motorist coverage policy. Going back to the first example in this article, if you get in a nasty car accident, but now it’s the other driver’s fault, he/she is liable to pay for the entire cost of medical treatments and car repairs. But what if they don’t have a liability policy? Or their policy’s coverage limit is not enough?
You can sue them, but that’s a long process. This is why having an uninsured motorist coverage policy makes sure that even if the driver at fault does not have liability coverage, you can get the money needed to pay for the different costs of the accident. The UM policy can also be claimed in a hit-and-run scenario.
Conclusion
With over 6 million car accidents every year and rising, accidents are more common than you think. All these policies might cost you some money, but in the long run, it is worth it.
