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Insurance

2010-11-01 13:31:00

Auto insurance

Question: Why do we need auto insurance?

Answer: In its simplest sense, auto insurance is smart planning — planning that can help protect you from expensive, sometimes devastating surprises. Think of auto insurance as part of your total financial plan; a powerful tool that can help: •Safeguard the investment you’ve made in your car •Pay for medical bills after an accident •Shield you from the costly damages of an accident-related lawsuit •Guard the valuable assets you’ve worked hard to collect (such as your home, retirement funds, stock or bond investments, etc.) •Protect you from uninsured or under-insured motorists •Pay for damage repairs due to theft, vandalism, or natural disasters; and, of course, •Strengthen your peace of mind, every time you take to the road. Types of Coverage: Liability- The lowest amount of coverage required is called liability and this is the sort of coverage that most states require you to have. Liability covers the expenses if you get into a car accident and hurt someone or damage their car. Liability insurance is the least expensive of the types of insurance but in most cases it is the most valuable. It is the most valuable because it is the coverage that will pay the damages done to another person’s property. It is important that you have liability insurance as in most states it is illegal to drive without it. If you are caught driving without liability you can have your license suspended, revoked or pay large fines. Collision- Collision insurance covers the damages done to your car if you hit something. This can be another car, a telephone pole or anything else. Collison insurance is important so that you will not have to pay for repairs in case you are in an accident. Collision insurance is especially important if you have a newer car, or a car with a lot of expensive modifications. Many people with older cars choose to not purchase collision insurance because the costs of repair can be higher than the cost of the car itself. Comprehensive- Comprehensive insurance is important because it covers the damages to your car that are not covered by collision insurance. For example, if a natural disaster occurs and your car is damaged, comprehensive coverage will pay for the expenses to repair it. When you purchase a newer car, many lenders will require you to have collision or comprehensive coverage in addition to liability. Significance- Overall, auto insurance is so important because it protects you and your property. It also safeguards the property of the other drivers who share the road with you. Accidents happen no matter how cautious you may be while driving and in order to be a responsible driver, you must be able to take financial responsibility those accidents. What Will You Pay?- Both collision coverage and comprehensive coverage have several factors that will influence how much you have to pay for the coverage. •The age and value of your vehicle. •The age and experience of the driver. •The age and experience of any others who will be driving your vehicle. •A new driver will increase your rates. •How many tickets you have had. •How many accidents or claims you have had. Many of us need automobiles to get from place to place, so we all know how useful they can be while also recognizing the fact that driving an automobile is dangerous. You might be careful in obeying traffic laws, but you never know when someone else will not and be the cause of an accident that involves you. Then again, mistakes do happen and you never know when something may occur that you will be at fault. These are reasons why it is important to have auto insurance.