Why do you think you need insurance? Most of you insure your life, property and even vehicles without understanding what an insurance coverage mean. Precisely, it protects you and your family against damage and loss. But, we fail to understand the importance of any kind of insurance. Automobiles have become a part of your life that, there is not a single day that goes by without using them. Your dependence on them is to the extent that if it wrecks, it affects your routine.
It is a wrong notion to consider auto insurance as an extra baggage. 60/100 Americans fret at the thought of insurance and unsurprisingly, most of them have wrong coverage. So, when you understand the need and importance of coverage the probability of you taking a conscious decision in this matter increases.
One of the wrong ways of looking at insurance is, considering it an investment; auto insurance is a term policy wherein, you get the benefit only when things go wrong. This is more of a precautionary measure that can be related to vaccination in medicine for better understanding. You do not wish upon yourself a disease, but in case you are exposed you are protected from it due to the vaccine.
In United States, auto insurance is mandatory but, some states approve the basic ‘liability coverage’. When you meet with an accident in which you are responsible for the damage, you will be legally liable. You will have to pay for the wreckage, injuries and damages caused to the other person. When your car has liability coverage, all these expenses will be covered within the limit of the policy and the balance has to be paid by you. ‘Bodily injury’ covers medical expenses and ‘property damage’ covers the vehicle. So if you do not have auto insurance, you will have to pay for the entire expenses for the other party involved in the accident.
The collision coverage takes care of the repairs of your car or the actual value of cash if the vehicle is determined total loss, deducting the collision deductibles. Imagine the amount of money you will end up paying and the stress you have to face mentally when you do not have an auto insurance coverage. You can choose different combinations that suit your need but, you should understand what you are signing up for before taking up the policy.
The bottom line is, insurance coverage helps you during the emergency and takes care of the expenses you are liable for.