6 Reasons Why You Need Car Insurance

Updated: June 2018

Having car insurance is required by law in 48 states and the District of Columbia. If you cause an accident, the auto liability coverage required on your car insurance policy helps pay for the other party's medical bills and property damage. It also helps pay your legal fees, if you're taken to court over the accident.

Each state's laws set minimum auto liability coverage limits that drivers are required to buy. A limit is the maximum amount your insurer will pay toward a covered claim. You may want to increase your coverage limits beyond your state's minimum requirements. Otherwise, you could end up paying out of pocket if, for instance, you cause a wreck that injures another driver and their medical bills exceed your coverage limits. Depending on where you live, some states require you to buy additional coverages on your car insurance policy, such as uninsured motorist coverage or personal injury protection.

If you cause a car accident, you may be held responsible for costs associated with it. These may include legal fees, the injured person's medical expenses or their lost income compensation. Liability coverage may help pay for these costs. Without liability coverage (or adequate liability limits), you would likely have to pay these costs out of your own pocket.

If you're financing or leasing your vehicle, your lender may require you to purchase collision coverage and comprehensive coverage. Since the lender or leasing agent is the lienholder of your vehicle while you're making payments, these two coverages may help protect their investment. Comprehensive or collision coverage may help pay to repair or replace the vehicle if it's damaged in a covered loss.

Even if you own your vehicle outright, you may want to keep collision coverage and comprehensive coverage on your car insurance policy. What if your car is damaged in a hail storm? Comprehensive coverage may help pay for repairs or replacement if your car is stolen or damaged by something other than a collision, such as falling objects or fire.

Or, say you accidentally hit a mailbox and damaged your car's front bumper. Collision coverage may help pay to repair your car if you hit another object or vehicle, regardless of fault.

Without comprehensive coverage or collision coverage, you would have to use your own money to get your car fixed.

Medical payments coverage and personal injury protection may help pay for your medical bills if you're injured in an accident. And it also may help cover your passengers' expenses due to the accident. Coverage may help pay for hospital visits, doctor bills and surgery.

Even though liability coverage is a legal requirement, many people drive without it. Uninsured motorist coverage may help pay for your medical bills if you're hit by a driver without insurance. This coverage is required in some states and optional in others.

Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. A car insurance policy may help protect your vehicle, your wallet and even offer peace of mind. Talk to a local agent, who can help you choose the coverage that's right for your needs.