What is Auto Insurance and why do you need it?


When you buy or lease an automobile vehicle, it is highly recommended to safeguard the investment with Auto Insurance. An auto insurance policy assists you in covering the costs of any damage that may come to your vehicle in any form. Whether it is vandalism, theft or any form of accident, this policy will ensure that you are not financially drained in any of the situations mentioned above. 

In some states, it is legally required for a vehicle to be insured, and a fixed interval of premium payment is decided, which is paid by the policyholder to the policy issuing insurance company. They cover the cost of damage to vehicles and any property obstructions, medical or funeral expenses sustained in the accident. 

There are two costs associated with an Auto Insurance policy. A premium and a deductible. The former is paid to the company, they financially take care of your losses, and a deductible is paid while a claim is filed. 

Here are a few reasons why you need Auto Insurance


In a situation where you cause an accident or become a part of one, the insurance will cover all of the expenses associated with it. If you are responsible for the mishap, then the insurance will cover the injured person's medical bills, vehicle repairs, and an income stream for them if they are left in a condition that does not allow them to work. Without any insurance, you are liable to cover all of these costs from your pocket and can be very financially draining.


Auto Insurance will cover the costs of the damage you have sustained in vehicular and medical form and any travelling passengers that were injured. In the case of an unfortunate event where multiple people are present in an automobile which gets into an accident.


In some states, it is mandatory by the law to have auto insurance or even if it is not, it is usually a requirement by the leasing company for you to get auto insurance for the vehicle. Lenders and leasing companies may ask you to purchase comprehensive and collision coverage. As lienholders of the vehicle, this insurance policy allows investment protection in case of any collision or theft situation. Gap insurance in an auto policy allows you to pay off a car loan if it is damaged or stolen and you own an amount greater than its depreciated value.

The bottom line is that there are multiple types of insurance, and all of them are beneficial, but Auto Insurance will protect you, your loved ones and your vehicle from any physical or financial harm. Collision and medical damages can be very difficult to cover up all by yourself, so be prepared in advance for such situations prove to be very beneficial in the long run.