To Insure or Not to Insure: That is the Question
Auto insurance is a policy purchased by an individual as an investment and protection in case of vehicular accidents and damages. If you happen to have a car, it is essential that you purchase one especially if it is the only asset you own.
But insurers and other financial experts say that everyone should have an auto insurance—not just those who can buy their vehicle. Here’s why:
It is in the law.
Before any debate sparks about insurance policies, the law regarding mandatory auto insurance coverage for US constituents vary per state. For example, in Virginia and New Hampshire, it is voluntary. But you do have to prove that you can pay for the damages your car driving would incur, especially if there is another party involved.
It protects you from financial insecurity when accidents do happen.
To make things clear, the only policy that is mandatory for every constituent, car owner or not, is the liability insurance. This policy is to protect the victim and their property from any damages brought by an automobile accident. This means that even though the driver is uninsured and cannot pay your hospital bills and the repair costs of your precious front yard, your wallet will not suffer terribly.
With this in mind, compulsory purchasing of auto insurance may actually make sense.
On the other hand, while not mandatory, car owners are still highly encouraged to insure their vehicles. The policy recommended for them is collision insurance, which protects their vehicle from damages incurred by theft, fire, crashes, and other accident-related incidents. In short, collision insurance is for the driver’s protection in case the one who damaged the car is unable or unwilling to pay for it.
Depending on what coverage you have, car insurance can protect you even from circumstances that are not accident-related.
Some companies offer additional coverage, like:
•Rental car (for those out-of-town/country trips that would require you to get from point A to B safely and quickly),
•Roadside assistance (if you happen to get stuck in the middle of nowhere), and
•Rental reimbursement (to have an alternative form of transportation while your vehicle is in the repair shop).
Of course, this would require additional investment on top of the standard coverage mandated by law.
As you can see, this coverage highly favors car owners. After all, owning a property entails both privilege and responsibility.
The bottom line is, everyone does need to have auto insurance in some form or another. How to pick the right insurance policy, however, is another animal altogether.
Firstly, you must know what circumstances you want to be protected financially from (property repairs? DUI damages?), and then research thoroughly. Comparing insurance company prices is not enough because every organization has different criteria when it comes to their pricing. And sometimes, expensive does not always mean the best, and cheap does not always mean bad. Find the one that strikes the perfect balance between good price and coverage.