Car insurance is very important. As a frugal person you might ask why waste money on insurance... but it isn't a waste and will save you lots of money.
Whether you’ve just acquired your driver’s license or you’ve been driving for years, let this sink in: there are more than six million car accidents in the U.S. every year. That’s a frightening statistic. Even though you’re a good driver, there’s a high chance you’ll be involved in a car accident at some point in your life.
Another fact: around one in eight motorists aren’t insured, which puts uninsured drivers at risk of jeopardizing their lifestyle and savings if they damage another driver or their property.
Read on to find out why auto insurance isn’t a luxury – it’s a necessity.
1. Protect Your Finances
This one is simple: you will be liable for any damages incurred if you are involved in an at-fault accident. These damages can be extremely costly because they include the other motorist or their passengers’ medical bills if they are injured. These unexpected medical costs can get large enough to wipe out your entire savings account.
With the cost of hospital stays, surgery, or emergency care aside, you will also be liable for any damage you did to the other driver’s car or property and any legal fees.
Even the cheapest car insurance policy should cover at least a portion of your liability – the primary purpose of car insurance is to protect you financially.
2. Comply with the Law
Almost every state in America requires drivers to have liability coverage as a minimum. As mentioned above, liability coverage will cover damages to property and other drivers if you are involved in an at-fault accident.
Although the laws vary from state to state, the penalties are generally severe. If you are caught driving without the state-prescribed minimum auto insurance coverage, you could receive a hefty fine, get six to eight penalty strikes on your license, or even have your car seized.
3. Protect Your Vehicle
Your car is an asset – making sure it’s covered by an insurance policy is the best way to protect your investment.
Auto insurance doesn’t just safeguard your vehicle by covering the cost of repairs if it is damaged in an accident; it also protects it in the case of fire, flood, theft, and vandalism.
Ensuring that your car is repaired when it’s damaged will also help it retain its value when you decide to sell it later on. Vehicles that are covered by insurance can be sold for a higher price – buyers value signs that the car they want to buy has been taken care of by the previous owner.
4. Get Peace of Mind
Worrying about what would happen to you, your car, and your finances if you have a car accident can negatively affect your mental health. When you purchase an insurance policy, you can enjoy the peace of mind that comes with knowing that you are protected. You also won’t have to worry about the cost of repairs or replacement if your vehicle is vandalized, stolen, or damaged in a fire or flood.