Auto Insurance

Why Auto Insurance Is Essential for Motorists

Concept of insurance is to provide help to policyholders when they need the most. To qualify for this help motorists should pay regular premium payments like a membership. As you cannot use any club facilities without being member you cannot make a claim if you do not have a policy that covers the damages. You need to buy the policy before anything happens. There is no way of knowing when you would have a serious accident or your auto would be stolen. Therefore, you need to buy the policy as soon as you buy the car.

Besides, it is a legal requirement to buy minimum liabilities policies to cover the damages you cause to other people. Usually this coverage is very limited and does not cover your own losses (except in no fault states where everyone insures their own losses). Most vehicle owners purchase comprehensive packages that at least include Liabilities, Collision, Comprehensive and Uninsured Drivers coverage.

Problems with Losing the Use of Cars

Most people in the World are highly dependent on their cars. Without it they cannot go to work, grocery store or drop their children to school or it becomes very difficult. So, it is not smart risking losing it at all. This could happen in two different ways when you do not have car insurance cover.

First of all, you run the risk of not being able to get your automobile repaired or buy a replacement following a sizeable damages or total loss. Not many people have money laying around to be used for a new auto purchase. Also, people would need to first pay the outstanding car loan before they can apply for another one.

So, it is generally necessary to buy Gap Insurance as well when you have a loan on the vehicle or you leased it. This addition pays for the shortfall between what an auto insurer would pay and the outstanding loan. This offers extra peace of mind that the loan would be settled as well if you were to lose the car to theft or accident.

Secondly, you are likely to lose your driving licence should you get caught driving without insurance. In this case, your problems and costs become a bit more serious. The record of license suspension will stay for every insurer to see for at least five years. This will result in expensive car insurance rates in such period until it is removed or become irrelevant any more. The cost of defending yourself in the courts will be pretty high as well as the fines.

Being unable to drive for whichever reason will put most people in serious trouble. The most noticeable one is the difficulty to get to work. The last thing you want in such circumstances is losing your job as well. Plus you will be socially awkward as it will be harder to swing around your friends or your favorite places. Explaining what happened will not be fun either.

 

Small Premium Payments or Large Out of Pocket Accident Costs?

When you consider all the likelihoods paying premium payments may not seem that bad after all. Even though you might struggle a bit you may be able to pay the premiums little by little. Most companies allow policyholders to spread the costs. If you are finding it hard to pay monthly premiums how are you going to find the money to pay for repairs or a new car? Also, how would you be able to face the liability claims against you if you cause an accident?