What is Car Insurance and Why Do You Need it?

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Car insurance is mandatory for every driver, for adults or teens and young drivers, but that doesn’t make it enjoyable to think about. It’s one of the most expensive ongoing costs of being a car owner and most of the time, it costs hundreds of dollars to pay for your insurance policy each year.

Despite being costly, car insurance is a legal requirement so there really is no point in worrying too much about it. Finding the best car insurance quote that you can find will ensure you aren’t breaking the bank every year when your current policy needs to be renewed.

Many drivers don’t pay much attention to their car insurance. They sign up with one provider and remain with that same provider for years to come. When their policy expires, they renew with their existing provider without taking the time to check for cheaper quotes.

Ask any driver if they know what their car insurance covers them for and most of them will probably have no idea. There are three types of coverage, ranging from minimal third-party coverage to fully comprehensive, and there is a huge difference between each type.

If you’re guilty of knowing very little about what your car insurance covers or why you actually need it, keep reading! We’re going to break down everything that you need to know about car insurance. 

What is Car Insurance?

Car insurance is a type of insurance that is required for any car to be legally driven on the roads. It provides financial protection for the vehicle in the event of damage or a road traffic accident.

Depending on the level of coverage, car insurance may provide compensation for damages to the vehicle, bodily injuries, and car theft. There are three levels of coverage:

  • Fully comprehensive – this option offers the most coverage but is also the most expensive. It covers you for the costs of car repairs, medical expenses, and vandalism for your vehicle.
  • Third-party – the cheapest level of coverage provides financial compensation for any damages to your car or other people’s vehicles in the event of a collision
  • Third-party, fire, and theft – slightly cheaper than fully comprehensive options for more expensive than third-party only, this option protects you if your car catches fire, or if it gets damaged or stolen.

Why Do You Need Car Insurance?

Auto insurance, just like home insurance, is mandatory for every driver. There are multiple types of auto insurance, one of which is specifically for cars.

This type of insurance is necessary to financially protect you and other drivers when on the roads. Aside from it being illegal to drive without valid insurance, it would also be extremely expensive if you didn’t have any coverage.

Your insurance provider helps with some of the costs if and when your vehicle gets damaged. Some coverage plans also pay for some of the damages to other people’s vehicles, so you aren’t left paying out of pocket for their repairs.

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