Auto Insurance

What is Auto Insurance?

Auto Insurance is a product that is required for everyone that operates a motor vehicle, for a number of reasons. It is required due to the potential damage that you and your vehicle could impose on other people and their property, not to mention on yourself and your own property.


How Does It Work?

When you are involved in an automobile accident, insurance companies will pay for a portion of the damages that have been caused by you and your vehicle. Insurance coverage will also often pay for the damages that were inflicted upon you and your property by others. Let’s say that you are driving on an icy road and your vehicle slides into another vehicle. If law enforcement personnel or the insurance company decides that you are at fault, your insurance company may pay for a portion of the damages that the other party suffered – to themselves or to their property.

This type of insurance coverage prevents you from having to pay for all of the damages out of your own pocket. You will need to pay what they call a “deductible,” which is the portion of the payment to the other party that the insurance company doesn’t pay. Insurance deductibles typically range from $100 to $1000, but amounts can vary. That $500 to $1000 can seem like a lot of money, but it can be well less than what you may have to pay the other party for even a small collision, if you had to pay for the total cost, out of pocket. Proof of insurance is also required by most Departments of Revenue before they will issue license plates.

Major Benefits

If by chance, you were to receive a moving violation from a law enforcement officer and you weren’t able to provide proof of insurance to them, you risk having to pay a fine. Some municipalities will impound your vehicle if you aren’t able to provide proof of insurance. For these reasons, insurance is definitely a product that you not only need but will want to have. It’s always better to have insurance and not need it than to need insurance and not have it.