Car insurance why do i need it

By clicking log in you agree to texting terms and conditions. Having car insurance is required by law in most states. If you are at fault in a car accident, the auto liability coverage required on your car insurance policy helps pay for covered losses, such as the other party's medical bills and damage to their vehicle or other property that results from the accident.

It also helps pay your legal fees, if you're taken to court over the accident. When you drive with quality coverage, you drive with peace of mind. Allstate auto insurance can help you stay protected for wherever the road takes you. Each state's laws set minimum auto liability coverage limits that drivers are required to buy.

A limit is the maximum amount your insurance company will pay toward a covered claim. You may want to increase your coverage limits beyond your state's minimum requirements. Otherwise, you could end up paying out of pocket if, for instance, you cause a wreck that injures another driver and their medical bills exceed your coverage limits. Some states require you to have additional coverages on your car insurance policy, such as uninsured motorist coverage or personal injury protection.

If you cause a car accident, you may be held responsible for costs associated with it. These may include legal fees, the injured person's medical expenses or their lost income if their injuries leave them unable to work.

Liability coverage may help pay for these costs. Without liability coverage or adequate liability limits , you would likely have to pay these costs out of your own pocket. If you're financing or leasing your vehicle, your lender may require you to purchase collision coverage and comprehensive coverage.

Since the lender or leasing agent is the lienholder of your vehicle while you're making payments, these two coverages may help protect their investment. Comprehensive or collision coverage may help pay to repair or replace the vehicle if it's damaged in a covered loss.

If you have gap insurance on your auto policy, this coverage helps pay off your car loan if the vehicle is totaled or stolen and you owe more than its depreciated value. Gap insurance is optional, and it typically works with collision and comprehensive coverage.

Even if you own your vehicle outright, you may want to have collision coverage and comprehensive coverage on your car insurance policy. While mandatory liability coverage helps pay for damage to another driver's vehicle, it's important to have coverage for your own vehicle. For example, what if your car is damaged in a hailstorm? Be safe and don't risk it! There are several ways to save money on car insurance.

Alternatively, a Third Party Fire and Theft policy, which includes some protection for your vehicle, might be sufficient for your needs.

The amount of cover that's right for you will depend on your personal situation and budget. As always, be sure to compare offers to find a policy that has the benefits and features best suited to your needs. Looking for Comprehensive or Third Party insurance? Start comparing car insurance policies now, or call 13 19 20 and let us help find you a policy with the features you need at a price that fits your budget.

The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and not all policies compared by iSelect are available to all customers. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs.

You should consider iSelect's Financial Services Guide which provides information about our services and your rights as a client of iSelect. But do you need more cover than that? Is car insurance compulsory? Do the laws change in different states? Do I need any other type of car insurance? Have you ever found yourself saying this? To cover this, you may want to look into purchasing gap insurance to pay the difference.

Note that for leased vehicles, gap coverage is usually rolled into your lease payments. Next steps: Check out this handy infographic on the types of required and optional drivers insurance coverages.

Is auto insurance coverage mandatory? What other types of auto insurance coverage are typical? What is gap insurance and do I need it? Understanding auto insurance—the basics Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. Auto insurance provides coverage for: Property — such as damage to or theft of your car Liability — your legal responsibility to others for bodily injury or property damage Medical — the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses Basic personal auto insurance is mandated by most U.

Who is covered by my auto insurance—and under what circumstances? Nearly every state requires car owners to carry: Bodily injury liability — which covers costs associated with injuries or death that you or another driver causes while driving your car. Property damage liability — which reimburses others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.

In addition, many states require that you carry: Medical payments or personal injury protection PIP , which provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.