If you’re like most people, you may not have been involved in an auto accident throughout your driving career. As you write out a check to your car insurance company every month, you may be wondering if it’s really worth having. The reality is that car insurance is a must for many different reasons.
Auto Loans Require It
Look at any auto loan definition. According to Lantern by SoFi, “In a nutshell, a vehicle loan is essentially a contract between the car buyer and the financing company or lender.” When you read through that contract, you’ll notice that the contract requires you to have vehicle insurance.
Most lenders aren’t going to give you money for a vehicle that isn’t insured. This is due to the fact that you likely won’t have the funds available to replace your vehicle in the event of an accident. They don’t want you to total your vehicle and default on your auto loan.
Most States Require It
Most states throughout the country require you to carry a minimum amount of insurance coverage on your vehicle. This helps to ensure that you’ll be able to pay for any damages or medical bills that you’re determined to be at fault for.
It’s best to talk to a local insurance company in your state or do some research online to determine if your state requires auto insurance and what the minimum requirements are.
Protect Your Financial Well-Being
No one wants to think about the consequences of being involved in an auto accident. However, it’s crucial that you prepare to ensure that your financial well-being is protected.
Insurance is necessary to cover the costs of damages and medical bills that occur due to accidents that you’re at fault for. You should highly consider purchasing collision and comprehensive insurance for fairly newer vehicles.
Covers Legal Costs
With the number of legal cases rising every single year, it’s a necessary factor that you’ll need to consider if you’re involved in a car accident.
If the other party to the accident wants to go to court over a settlement amount, your insurance coverage will likely help to cover those legal fees. Without insurance, you’ll be stuck paying for a lawyer out of your pocket, which can get quite costly over time.
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Coverage For Your Passengers
While you may not be overly worried about paying your medical bills in the event of an accident, it’s about more than just you. What happens if you’re involved in an accident, and you have passengers riding with you that get injured? You’re going to be responsible for paying their medical bills for adequate treatment post-accident.
We all know that medical bills can get very costly. Having auto insurance can assist with paying their medical bills so that you don’t have to.
While you may initially think of car insurance as optional, the reality is that it’s a must. Not only will it help to protect your future financial well-being, but it’s likely required by the state that you live in and your auto loan lender.