The Importance of Insurance

Auto Insurance: A Sneak Peek

14 March 2022

Katrina Terry

You must have heard about auto insurance, otherwise known as car insurance. If you haven't, consider this type of insurance as an agreement between car owners and insurance companies. In this contract, insurers agree to protect their clients against losses arising from eventualities like accidents, lightning strikes, self-ignition, acts of terrorism, and natural calamities. In return, the vehicle owners pay a pre-determined premium. The sections below introduce you to today's essential policies and why you need them.

Common Auto Insurance Policies

Here are some common types of car insurance:

1. Collision Insurance

Collision auto policy covers any damages your car may incur when it makes contact with any objects. That means, if you have collision insurance, your provider will cater for losses arising from collisions with other vehicles and stationary trees, poles, fences, or buildings. Most insurance companies offering this policy also cover damages your automobile may sustain from single-car accidents like rollovers and flips. And the best thing is if you have this coverage, your provider is likely to pay regardless of whether or not you are at fault.

2. Comprehensive Insurance

Suppose your automobile is damaged in any other incident besides collision. In that case, if you have comprehensive coverage, your insurance provider will cover most replacement or repair costs. Simply put, this policy protects your vehicle against damage-causing events you can't control. These include theft, vandalism, extreme weather, and accidents involving bears, fallen trees, and fires. But, comprehensive insurance doesn't cover damages and medical expenses resulting from collisions.

Why Auto Insurance is Necessary

Every car owner needs auto insurance for the following reasons:

1. Financial Protection

Sometimes car accidents result in extensive property damages and third-party injuries. When that happens, the responsible party may be required to cover any costs, legal fees, or medical bills associated with the event. Moreover, injured victims may seek compensation for any lost income. If your car caused all these, you need auto insurance to step in and pay for all relevant costs and expenses. Otherwise, if you don't have coverage, paying out-of-pocket is the only viable option left. In extreme cases, using your money to compensate injured third parties and paying for repairs will cripple your finances. That is why you need to protect yourself with auto insurance.

2. Peace of Mind

Auto insurance protects car owners against financial losses, and with that comes peace of mind. Remember, approximately 6 million accidents happen in the United States each year. That means there are high chances you may be involved sometime in the future. But that shouldn't give you sleepless nights or deter you from using your automobile daily. All you have to do is get coverage from a reputable car insurance provider. Once you have done that, rest assured your insurer will have your back when unexpected car-related incidents happen.

For more information, contact a car insurance provider near you. 

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