What is Car Insurance and its importance
25 November 2020 | 5 Min Read
Car insurance is a contract involving an individual and an insurance company. You get to pay a certain amount of money- the premium, while the insurance company agrees to pay for your losses according to the policy. Many persons recognize the importance of cars in their day to day activities. For a lot of individuals, insurance is difficult to invest in because of the expenses involved and the chances of not getting anything in return. However careful you are, that doesn’t entirely prevent you from getting involved in an accident with another driver, or from colliding with an object on the road.
Aside from traffic accidents, car insurance- depending on what coverage you have covers you if your vehicle is stolen, burnt, or damaged by certain acts of nature such as a fallen tree, hailstorm, or a hurricane. However, most insurance companies subtract a little deductible charge before your vehicle is reclaimed.
Here are some of the importance of car insurance;
It Provides Coverage for Other People’s Property
Vehicle repairs can be costly. If you are involved in an accident where you hit another person’s car or damage city-owned property, you may have to pay for the repairs or replacement of the properties and vehicle that you hit. However, the property damage coverage on your insurance will cover the costs according to the agreed terms, and this saves you money that would have come out from your wages.
It Can Help You Avoid Arrest and a Lawsuit
Without insurance, you can be sued for damages. Also, it is mandatory to have insurance while driving in the US because you are at risk of losing your driver’s license and getting fine without it. Getting involved in an accident without liability coverage might mean you are facing serious penalties which include bills and getting sued for the damages caused.
Having your car insurance gives you a sense of security, and your mind is at ease whenever you are driving, knowing that you are protected every time you are on the road.
It Prevents You from Losing Wages and Property
Imagine you are at fault in an accident, and you don’t have car insurance- that would mean settling the accident victim’s car damage and medical bills out of your wages. And this could mean selling your property, stocks, or being indebted for years. Those who get involved in an accident at no fault of their own are entitled to have their car repairs, medical bills, and other expenses settled by the insurance of the person who was at fault. However, if the individual other person involved has no car insurance; you could end up losing significant assets and your wages trying to settle the bills.
Saves Cost on Repairs and Replacement
Lastly, depending on the kind of car insurance coverage you have, your vehicle can be repaired or replaced if damaged due to external factors like fire, natural disaster, or accidents. Thus saving you the expenses involved in replacing it yourself.
It is, therefore, necessary to review your insurance policy and know which one to use considering your budget. The good news is car insurance is affordable and widely accessible. In the event of an accident, thanks to car insurance, you don’t have to bear the expenses alone.