Auto insurance is considered a necessary but often unpleasant expense, as evidenced by the fact that 215 million drivers in the United States currently have it. While many people associate auto insurance with covering damages to their vehicles, it actually offers other overlooked protections as well.
In certain states, such as Massachusetts, auto insurance is mandatory to register your vehicle. To comply with the law, drivers must purchase at least the minimum amount of four coverages, known as Compulsory or Mandatory Coverage under the auto insurance Massachusetts system, though they can choose to increase their coverage if they desire.
Furthermore, E.J. O’Neil’s insurance agency notes that purchasing additional lines of coverage in conjunction with auto insurance could result in a lower-priced policy. In this article, we’ll explore how auto insurance protects more than just your car.
5 Benefits of Auto/Car Insurance:
1. Protects Your Finances in Case of an Accident
Let’s start with the most obvious way that auto insurance protects you: financially. In the US, motor vehicle accidents result in almost $1 trillion in losses annually, and without insurance, you could be responsible for paying tens or hundreds of thousands of dollars in damages, medical bills, and lost wages.
According to Forbes, the average cost of car insurance in the US is $1,601 per year in 2023. However, the consequence of not having insurance can be much higher. Fortunately, auto insurance can cover these expenses up to the limits of your policy, saving you from potential financial ruin.
2. Protects You from Lawsuits
Auto insurance not only covers damages but can also protect you from lawsuits. According to reports, in 2019, the average property damage and bodily injury liability claims were $4,525 and $18,417, respectively.
Without insurance, paying out of pocket for damages and legal fees from a lawsuit could be financially devastating. However, with auto insurance, you have the peace of mind of knowing that your insurer will provide legal representation and cover any damages awarded up to the limits of your policy.
This is especially important considering that around 13% of drivers in the US are uninsured, making it more likely that you could end up in an accident with an uninsured driver who may try to sue you for damages.
3. Protects You from Uninsured and Underinsured Drivers
Even if you’re a safe driver, you can’t control the actions of others on the road. If you’re in an accident with an uninsured or underinsured driver, your own insurance policy can provide coverage.
Uninsured/underinsured motorist coverage is designed to protect you in case the other driver doesn’t have enough insurance to cover the damages they caused. This coverage can also provide protection in case of a hit-and-run accident.
4. Protects You from Non-Collision Events
Comprehensive coverage is an essential component of auto insurance that can protect you from non-collision events as well. Comprehensive coverage can safeguard you against damage or theft of your car due to events such as fire, severe weather, or theft.
This type of coverage can also protect you in case of vandalism or if your car gets damaged by hitting an animal. Such events can cause significant financial damage to your vehicle, leaving you to bear the brunt of the expenses.
Comprehensive coverage can provide you with peace of mind and help you avoid hefty out-of-pocket expenses in case of unexpected events that are beyond your control.
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5. Protects You on Road Trips
Finally, auto insurance can protect you on road trips. Whether you’re driving to a neighboring state or taking a road trip across the country, your policy will still apply. However, it’s crucial to review your policy before you leave to ensure that you have adequate coverage for your trip.
Depending on your destination, you may need to purchase additional coverage or adjust your limits to ensure that you’re fully protected. For example, if you’re traveling to a state with lower minimum coverage requirements than your home state, you may want to increase your coverage limits to avoid any gaps in your protection.
Similarly, if you’re driving in another country, your policy may not provide coverage, and you may need to purchase temporary insurance for the duration of your trip. Taking the time to review your policy before you travel can save you from potential headaches and expenses down the road.
Auto insurance is much more than just coverage for your car. It can protect you financially, legally, and physically in a variety of situations. So the next time you’re paying your auto insurance bill, remember that you’re not just paying for protection for your car – you’re also protecting yourself and your finances.