Understanding Insurance Policies

Posted on: 19 August 2021

The aftermath of an accident is one of the most stressful and tedious times. If your accident involved other motorists or property owners, you might find yourself engaging in lengthy negotiations to determine who was responsible for the crash. 

Worse still, you may be forced to cover all the damages out-of-pocket. The good news is that personal auto insurance can cover all the repair or replacement costs and save you from the hassle of long negotiations. Below are the top four benefits of personal auto insurance.

Protect Yourself and Others

Having auto insurance is a good way to protect yourself, your passengers, and other drivers. For example, if you're involved in an accident while carrying your friends, medical payments coverage will take care of your medical bills and your passengers'. Similarly, uninsured motorist coverage will cover your medical bills if you're hit by another driver who doesn't have insurance.

Additionally, you get to protect yourself from financial liabilities. For instance, if an accident you have caused leaves another motorist with severe injuries or unable to work, chances are they'll need compensation. In such a case, liability coverage can save your wallet.

Protect Your Vehicle

A car accident can happen when you least expect it. You may accidentally hit a post and damage your vehicle's front bumper. Without insurance protection, you may have to abandon your car for a while as you source funds. But if you have collision coverage, the repairs will be covered, so you can continue to use your car. 

Apart from that, your car can be stolen or damaged by natural occurrences like storms or fires. Here, you can rely on your comprehensive coverage to pay for the repairs or replacements. 

Helps You Satisfy Your Lender's Requirements

Most lenders and banks require you to have collision, comprehensive coverage, or liability insurance before financing your car purchase. Being the lienholder of your car, they do that to ensure their investment is well protected. If a covered incident happened, the insurance would cover their loss.

For enhanced protection, you can add gap insurance to your policy. It pays off your auto loan if your vehicle is stolen or totaled, and the amount owed is more than the depreciated value.  

Ensures You Are Law Compliant

In most states, it's a requirement by law to have liability insurance coverage. Some states also ask for additional coverage on your policy, like personal injury protection and uninsured motorist coverage. Check with your insurer what the laws in your state indicate. Overall, having personal auto insurance ensures you're on the good side of the law, which is essential for your peace of mind.