What is Auto Insurance?

Auto (car) insurance is a policy obtained by vehicle owners to reduce costs associated with getting into an automobile accident. It is also a kind of insurance coverage for damage and resulting from an auto. Insurance of this kind can cover a wide range of things based on the kind of auto insurance that you obtained.

All auto insurance plans require Premium, which is the payment an insurer pays to have auto insurance. Premiums for auto insurance can be highly divergent and are identified by a number of factors. Gender is the major determinant for auto insurance premiums. Statistically, men are 80% more likely to be engaged in an accident, and therefore have a greater need for insurance. Auto insurance premiums for men are higher than auto insurance premiums for women. Likewise, teenagers are thought to be high risk and will have to pay higher auto insurance premiums. The auto insurance premium can be decreased if the teenager takes a protective driving course. Many states require teenagers to take protective driving courses in order to get a driving permit and auto insurance.

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Auto Insurance

Why is there a need for an Auto Insurance?

There are more than 6 million car accidents in U.S. every year, on average, based on the data obtained from the National Highway Traffic Safety Administration.

A car insurance policy helps to protect your finances from these astronomical and unexpected expenses. Apart from helping you with the cost of an accident, your car insurer can help protect you from liability legal cases through your policy’s liability coverage. Below are the main reasons why you may need auto insurance.

Auto insurance saves time when accidents happen. If you have car insurance, your insurer’s expertise will support you through the unpleasant accident process, like working with another driver’s insurer, walking you through the claims process, helping you to find a good repair shop, and getting your claim settled easily and fairly. And if you get into an accident with an uninsured driver, your insurance company can help you recover costs through your policy’s uninsured motorist coverage.

Cons of not having an Auto Insurance:

Driving your car without having proper insurance can result in serious implications. The following are some of those implications:

  • If an uninsured driver is involved in a vehicle collision and they are at fault, the uninsured is financially responsible for any maintenance to or replacement of their personal vehicle. Apart from uninsured motorists, drivers with the minimum insurance coverage are also financially responsible for their own vehicle. When it comes to car insurance, though, many people have an insurance policy that covers damages or injuries to their own vehicle along with the other parties. This benefit is lost when a motorist does not have car insurance.

  • This is one of the primary reasons why it is unlawful to drive without car insurance. If one driver causes an accident, the other driver must be paid for the loss of their vehicle (and in many cases, any pain, suffering, lost wages and medical bills related to the accident). Without insurance, the driver at fault is financially responsible for covering all of these and more. Also, many auto insurance policies cover some amount of lawful liabilities, too. Without this, the uninsured would be personally responsible for all their court costs in addition to paying for the other driver’s replacement vehicle, medical costs and whatsoever else they ask for.

  • In addition to a financial fine, many states take the penalties a step further by suspending the uninsured vehicle registration or driver’s license and impounding the uninsured vehicle. Some states will even arrest an uninsured driver. law enforcement driving without insurance is a very serious offense and will levy punishment as such.

  • Driving without car insurance is unlawful. If a driver is in an accident or pulled over by the police, one of the implications of not having insurance will certainly include a fine of some sort. While the specific amount of the fine will vary from state to state, all states require all drivers to carry valid car insurance. State-specific monetary penalties can be found by contacting either the state’s Department of Motor Vehicles (DMV) or a local law enforcement office.

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