When most people think about car insurance, the first thing that comes to mind is protection in case of an accident. And while it’s certainly important to have coverage in case you are involved in a collision, car insurance does much more than that.Â
Having the right car insurance can protect you and others in several ways. Here are six of the most important ways how proper coverage can keep you safe on the road.
Pay for damages
If you are at fault in an accident, car insurance can help to pay for the damages that you cause. This can include repairs to the other vehicle involved, as well as any medical bills that may result from injuries sustained in the accident. Without insurance, you would be responsible for paying these expenses out of pocket, which could quickly become very costly.
On the other hand, it also depends on what type of insurance you have. For example, if you only have liability insurance, then your policy would only cover damages to the other person or vehicle involved in the accident.
If you have compulsory third-party (CTP) insurance, you’ll have peace of mind knowing that it covers liability for other people’s injuries or death in a motor vehicle accident. CTP insurance is usually mandatory or required for all vehicles in many jurisdictions, including Australia.
If you want full coverage, then you would need to purchase additional coverage, such as collision and comprehensive insurance. So, before you choose, comparing auto insurance quotes is essential to ensure you’re getting the right protection for your needs. Pay attention to the coverage and make sure you understand exactly what is included in your policy.
Prevent lawsuits
If you are involved in an accident and found to be at fault, the other party may decide to sue you for damages. If you have car insurance, your insurer would be responsible for defending you in court and paying any damages that may be awarded. Without insurance, you would be on your own to defend yourself and would be responsible for any damages that are ordered by the court.
Additionally, most car insurance policies include personal liability coverage, which would protect you if you are sued for something that is not related to a car accident. For example, if you are found liable for damages in a slip-and-fall accident at your home, your liability coverage would also help to pay for the damages.
Cover hit-and-run accidents
Car insurance can also help to protect you in the event of a hit-and-run accident. If you are hit by a driver who then flees the scene, your insurance policy can help to pay for the damages, up to your coverage limits. Without insurance, you would be responsible for paying for the repairs yourself, which could be very costly.
This type of coverage is typically included in comprehensive insurance policies. Comprehensive insurance covers damage to your vehicle that is not caused by a collision, such as theft, vandalism, and weather damage. It also covers hit-and-run accidents.
Protect your passengers
If you are involved in an accident, your passengers may be injured. If you have car insurance, your medical payments or personal injury protection coverage can help to pay for their medical bills. Without insurance, you would be responsible for paying these expenses out of pocket. Even worse, if you cannot afford to pay the medical bills, your passengers may sue you for damages.
And if your passengers decide to sue you for their injuries, your liability coverage would help to pay for their damages, up to your coverage limit. So, if you regularly have passengers in your vehicle, it’s important to make sure you have adequate coverage.
Protect other drivers
If you are involved in an accident with an uninsured or underinsured driver, your car insurance can help to pay for the damages. Uninsured motorist coverage would pay for your repairs if you are hit by a driver who does not have insurance. And underinsured motorist coverage would pay for your repairs if you are hit by a driver who has insurance but doesn’t have enough coverage to pay for your damages.
Without this type of coverage, you may have to dip into your savings or take out a loan to pay for them. So, it’s important to make sure you have adequate uninsured/underinsured motorist coverage.
Cover your expenses if your car is totaled
If your car is totaled in an accident, your insurance policy can help to pay for a replacement vehicle. And if you have a loan or lease on your car, you would be required to have this type of coverage.
In this case, comprehensive and collision insurance are the two types of coverage that would pay for a replacement vehicle. Depending on the value of your car, you may want to purchase both types of coverage or just one.
No one wants to be in an accident, but if you are, it’s important to have the right car insurance. The six ways we listed above show how having car insurance can protect both you and other drivers. Make sure you review your policy regularly to ensure that you have the coverage that you need.
