Auto Insurance Facts: What It Is and Why You Need It
Is auto insurance important?
Consider these statistics:
- There are 6 million car crashes every year in the US (that’s 11 accidents every minute).
- 2 million people experience permanent injuries from car accidents every year.
- 90 people die in car accidents every day.
Even if you’re a safe driver, there’s no guarantee that others around you are. Nearly 50% of teens admit to texting behind the wheel, making them distracted drivers. Distracted drivers cause over 1,000 accidents every day.
Add in other factors beyond your control, such as road and weather conditions, and you’ll begin to understand why auto insurance is important.
Why do you have to have car insurance, even if it’s not required where you live? In this post, we’ll reveal important auto insurance facts you need to know.
Read on to understand the importance of auto insurance.
What Is Auto Insurance (And Why Do I Need It?)
Auto insurance is a contract you (the policyholder) make with the insurance company. Your role is to pay premiums every month, while the insurance company pays for losses defined in the policy.
Most auto insurance policies include:
- Property coverage (if your car is damaged in an accident or stolen)
- Liability coverage (if someone else suffers bodily harm or vehicle damage from the accident)
- Medical coverage (if you or the injured party require medical treatment, rehab, or therapy)
Why do you have to have car insurance? Put simply, the law requires it. In many states, you cannot get a driver’s license or legally purchase a vehicle unless you can show proof of auto insurance.
Even in the few states that don’t require a full policy, drivers are still responsible for paying any damages if they’re involved in an accident. The average collision claim is $3,434, not including injuries or medical costs.
Do you really want to risk not carrying auto insurance and paying those bills out-of-pocket?
Potential Risks Drivers May Face
No matter how clean your driving record may be, you face many risks every time you pull out of your driveway. Here are a few common risks to consider.
1. You Cause a Collision
What if you’re momentarily blinded by the sun and you cause a minor fender-bender? Liability insurance pays for damage to the other driver’s vehicle, as well as any medical bills if they’re injured.
2. You Accidentally Damage Your Own Vehicle
What if you lose traction on an icy winter road and crash into a guard rail? Collision insurance will pay to repair the damage to your vehicle.
3. Your Car Is Damaged by Wind or Hail
What if a hailstorm dents your car or a hurricane drops a tree limb through the roof? Comprehensive insurance will cover the repair costs of something other than a traffic accident.
4. You’re Struck by an Uninsured Driver
13% of US drivers don’t carry auto insurance. If one of them hits you, you’ll be glad you have uninsured motorist insurance to cover your repair and medical bills.
5. You’re Involved in a Single Car Wreck
What if you lose traction on a rainy day, hit a tree, and sustain injuries? Medical payments coverage will take care of those expenses that result from the accident.
6. You Can’t Work Due to Injuries
What if you’re involved in a serious accident and can’t return to work right away? Personal injury protection, or PIP, can cover your medical bills and also compensate for lost wages.
Common Auto Coverages
We briefly mentioned different types of coverage in the scenarios above, but let’s examine them more closely.
1. Bodily Injury
If you cause an accident that injures someone else, bodily injury coverage pays for the damages you’re legally responsible for. This includes medical bills and loss of income.
Collision insurance pays to repair your car if you’re hit by another driver or if you hit another car or object. This is true no matter who is at fault.
This type of insurance covers anything “other than collision.” This includes theft, vandalism, severe weather damage, or hitting an animal on the road.
4. Uninsured Motorist
This insurance covers property damage or bodily damage that you (or your passengers) sustain if you’re struck by a driver without auto insurance.
5. Roadside Assitance
This coverage offers you help if your vehicle is disabled and leaves you stranded. It can even help if you’re a passenger in someone else’s vehicle.
6. Gap Coverage
If there’s a “gap” between what you owe for your car and its actual cash value, this insurance makes up for the difference.
Auto Insurance Terms to Know
Like other types of insurance, auto insurance has its own vocabulary. Here are some important terms you should know.
- Liability: The amount you’re responsible for paying in the event of an accident.
- Deductible: The set amount you pay out-of-pocket before insurance coverage kicks in.
- Premium: The total amount you pay for the auto insurance policy.
- Limit of liability: The maximum amount your insurance company can pay based on your policy.
Understanding these basic terms will help you decide which types of coverage are best for you.
Things That May Affect My Car Insurance Rate
Auto insurance rates vary for a variety of reasons, including:
Certain age groups (including teens and seniors) may have riskier driving behaviors and are therefore riskier to insure.
Is your area prone to severe weather? Do you live in a big city or rural town? What’s the average price of car repairs and medical costs in your area? All of these factor into your auto insurance rate.
3. Type of Vehicle
Your rate will vary depending on the type of car you drive, how old it is, and what safety features it has.
4. Driving History
A clean driving record is likely to get you a better rate, while a history of accidents and violations makes you riskier to insure.
Auto Insurance Facts: Now You Know
When you examine auto insurance facts, the answer is clear.
Auto insurance isn’t optional—it’s mandatory. There are simply too many risk factors involved every time you get behind the wheel.
Don’t leave it to chance. Auto insurance is the best way to protect yourself, your vehicle, and other drivers on the road.
Why you need Car Insurance?
Auto Insurance also known as car insurance help protects drivers pay for expenses when they get into an accident. Auto insurance policies provide you with a minimum of liability insurance in case you, your passenger or the people in the other vehicles get hurt.
We all love the freedom of choice but with that independence comes responsibilities.
As your local insurance professionals, we are dedicated to securing drivers with the best auto insurance in California. Driving has become a necessary part of our lives; something many of us truly cannot live without. Whether it’s a quick cruise down the block or a road trip across the country – every time you get behind the wheel you place yourself and your family at risk.
At Choice Plus Insurance, we are proud to provide superior customer support, client experience and auto insurance rates across California. We have the ability to provide you with competitive auto insurance rates online, by phone, by email or in person; allowing you to secure your policy the way you want.
We love to go above and beyond for you so you can rely on your insurance protection. It’s important to remember that auto insurance can protect you from a loss in the event of an accident.
At Choice Plus Insurance we recognize that coverage and options can become a bit overwhelming that’s why we are here, protecting yourself and family is forefront in our minds as well. That’s why our insurance specialists are dedicated to helping you find the most appropriate auto insurance coverage.
Contact Choice Plus Insurance to learn more about our various coverage options and receive a complete coverage review.
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