Owning a vehicle can be a real headache financially. Not only do you have to buy the car, but you also have to buy gas and pay for maintenance, such as oil changes, new tires, new brakes, new headlights, and other items. On top of that, you have to pay registration fees. And let’s not forget insurance. This is one of the most expensive aspects of owning a vehicle.
But why do you need car insurance exactly? It’s important for various reasons—and not just because it’s state law. Let’s dive into some of them now.
It may be helpful to first look at some car insurance statistics to get a better idea of how the process works. On average, auto insurance premiums are $1,674 per year or $140, but not everyone pays the same amount of money for car insurance. It depends on your car, your driving experience, driving record, and even your gender.
You may be surprised to know that women often pay less than men for car insurance. That’s typically because men drive more on average and are more likely to engage in risky behavior while behind the wheel.
Age is another factor when it comes to auto insurance rates. Teens have the highest insurance rates due to less experience—more than triple that of a typical adult driver. Premiums are lowest when a person is in their 40s through 60s, but rise again as a person reaches their 70s.
When you look at your car insurance bill, you may be thinking that you’re making your insurance company rich. While your premium may be high, think of the peace of mind you’re getting.
After all, the main reasons why you need car insurance are to provide you (and other drivers) with compensation and protection.
While car insurance may take a bite out of your wallet, it protects you financially. If you get into an accident and cause vehicle damage and injuries to someone else, your insurance premium pays for the damage. Without insurance, the victim could file a lawsuit against you, and you could lose everything you have. The same holds true if you are the victim. Instead of filing a lawsuit, you simply file a claim with your insurance company.
Another reason why it is important to have auto insurance is that car repairs are expensive. If you get into an accident, you don’t have to worry about paying out of pocket for repairs or replacement if you have insurance. The insurance company will pay for the damage. If you have rental car reimbursement coverage, your insurer will even pay for you to rent a car while you get your car repaired or replaced. Because your insurance company will cover all (or at least a good portion) of the costs, you won’t be left stranded without a vehicle. You can continue life as normal.
Auto insurance is also the law. Without it, you could pay hefty fines and even lose your license.
Now that you know why it is important to have car insurance, be sure to pay your premiums promptly. Keep payments low by practicing safe driving habits while on the roadways.