Published: August 2015
Q: Do I really need car insurance?
You might not think you need car insurance, but it is a legal requirement in most states, says Walla-Walla, Washington-based Allstate agent, Machelle Colligan.
"It may seem silly to pay for something you might not ever use, but the number one reason you need auto insurance is because it's the law," says Colligan.
Aside from the legal requirement, car insurance makes good financial and personal sense, she says. Depending on the coverages you select, a car insurance policy can help protect you against the unexpected, from liability lawsuits to the costs of renting a car if yours is being repaired.
Car insurance can benefit you directly in straightforward ways, such as protecting you financially in the event of a theft or accident — both of which can be very expensive if you're uninsured. Most states don't require all of the standard types of coverage, typically including liability, collision and comprehensive coverage, but a minimum of liability insurance is required in most states.
"Stuff happens — even if you're not at fault. Car insurance can be important to protecting your financial situation in an unfortunate event," says Colligan.
- Liability Coverage: The liability portion of your coverage can protect your pocketbook from liability lawsuits. If someone else is injured in an accident you caused, this essential coverage helps ensure they're taken care of — and that you're at diminished risk for out-of-pocket compensation.
- Rental Reimbursement Coverage: Car insurance can also help cover other things, such as the cost of a rental car while your vehicle is being repaired.
- Medical Payments Coverage: "In some states, such as Oregon, medical and personal injury coverage is legally required," says Colligan. "Insurers in most other states offer such coverage, even if it isn't required. It's a good idea, because this type of insurance can help with unpaid medical bills of you and your passengers, and protect your finances from expensive health costs — even if you have health insurance."
"Imagine a world where nobody had insurance — you might be a little less comfortable on the road, and wary of other drivers."
Your best bet, says Colligan, is to make sure you're appropriately insured for your particular needs, and that starts by having a good relationship with your insurance agent.
"Having a good relationship with your agent can help you make informed decisions about your car insurance. It can make choosing the right level of coverage easier — and in the unfortunate event of an accident, damage, or theft, they can provide needed guidance."