Car insurance, auto insurance, or accident claim insurance – call it what you will – is one of those grudge purchases that all vehicle owners simply cannot afford to not have in place. This particular type of short-term insurance covers far more than merely the asset value of your car in the event of fire or theft. In this article, we look at 6 ancillary protection benefits that car insurance policies provide motorists with.
1. Mandatory compliance
Car insurance is a legal requirement in almost every country in the world. In the United States, for example, New Hampshire is the only state where, as a driver, you’re not required to have car insurance in place, as long as you can provide proof that you’re financially responsible. Car insurance laws are enforced in all the other 49 states and lacking car insurance could put you on the wrong side of the law. Basically, car insurance covers your liability or responsibility for any damages (such as property damage and bodily injury) you may cause while on the road. This is the primary reason why it is enforced, even though there are ancillary benefits in addition to covering your legal liability (a minimum state requirement), which we will discuss below.
2. Legal protection
As a driver or car owner, driving around without insurance leaves you exposed to risk and consequential penalties which can be harsh. In the event of a road accident, not having car insurance in place could easily land you in jail, especially if you’re at fault and the accident results in property damage, bodily injury or loss of life. In this regard, one of the major benefits is that it provides peace of mind when driving. On the other hand, motorists who drive without insurance cover often fear being pulled over by traffic or law enforcement officers, which could increase the risk of being involved in an accident.
3. Accident victim protection
Depending on the severity, a car crash may result in injured victims. If you’re the driver and you have car insurance, your insurer may cover the medical costs of survivors and possibly provide them with compensation, especially for damages such as loss of income and long-term disability. Accident victims who know when to work with a car accident lawyer often have peace of mind for various reasons. For instance, if you happen to be at fault, you know that the accident attorney will provide you with proper advice as far as compensation and legal consequences are concerned. On the other hand, if the other vehicle’s driver is at fault, an accident attorney can also help you file your claim to seek compensation.
4. Litigation protection
Litigation can be extremely costly, especially for cases involving a car accident. If an individual sustains injuries as a result of a car accident you were involved in and decides to sue you, car insurance will protect you from the financial burden of legal defence fees. Nonetheless, the majority of car accident cases are settled out of court with proper legal advice from both sides.
5. Vehicle repair protection
Another benefit of having car insurance is that after a crash, you are spared the financial burden of costly repairs. Of course, this will largely depend on the type of cover, or policy extensions, that your insurer provides, and that you have opted-in for, as well as the terms and exclusions of the policy wording. Collision insurance, for instance, covers the costs of repair in case you happen to collide with another car or crash into a tree and your vehicle ends up with dents and broken parts.
6. Car loan protection
If you bought your car with a financial loan, meeting your monthly repayments after an accident can become problematic. Even after a car crash, your lender will still expect your monthly car loan repayments to be made by the due date. Depending on your car insurance policy wording, your insurer may cover your car loan repayments for the period that your car is being repaired, provide a hired-car, or, if your car is a write-off, provide a new car replacement once the insurance assessor has completed investigations.
It is evident that the right car insurance coverage will protect your vehicle, while at the same time, save your wallet and provide peace of mind after an accident. All the same, it is important to understand that car insurance policies differ, each with specific terms and limits to what can, and cannot, be covered. For instance, liability coverage is the mandatory minimum requirement in most places and covers bodily injury liability and property damage liability. In a nutshell, other common types of car insurance include the following:
- Uninsured and underinsured motor cover – provides cover for medical bills and repairs when an uninsured or underinsured driver bumps into your car.
- Comprehensive cover – this covers damages to your car resulting from things such as fire, theft, or vandalism. In some cases, it provides cover for repairs and even replacement depending on the circumstances of the accident.
- Collision cover – covers damages from a collision with another vehicle or solid object and may even help replace your car or grant you its actual value in cash.
- Medical payments cover – provides cover for injured passengers or family members travelling in the car in the event of an accident.
- Personal injury protection – covers medical expenses, loss of income, and other benefits relating to an accident victim after the event.
As you can see, there are more than enough reasons to protect your investment with car insurance and to work with an experienced accident attorney after a car crash.