Automobile insurance, like any other insurance, is used to protect the individual or cover any financial losses which may occur from operating a motor vehicle. While insurance premiums can be expensive and it may be tempting to forgo automobile insurance altogether, in most circumstances that is not feasible.
The bare minimum every driver of a motorized vehicle is required to purchase is liability coverage. The amount of liability coverage varies from state to state and it is important to have the minimum amount as required by law. Without basic liability coverage a driver could be given a ticket, have their drivers license revoked, or possibly even be arrested should they be pulled over by a police officer.
The reason why liability coverage is so important is because it compensates, or makes whole, another individual should you be involved in an accident where you are at fault. In an at fault accident, the driver will be responsible for any damages incurred and if the driver does not have liability coverage they will be responsible for the full cost of the damage. Due to the substantial financial risk, liability coverage is important to prevent financial ruin such as bankruptcy of judgements resulting from a lawsuit.
Comprehensive and collision are often refer to together because they denote accidents in which the driver is not at fault. Running into debris while driving or hitting a pothole and veering off into a curb damaging the axle would be considered collision. An act of god such as a lightning strike hailstorm, or a severe thunderstorm which causes a branch to fall on the car is referred to as comprehensive. Comprehensive and collision coverage reimburses the driver or pays for auto repairs should damage occur that wasn't caused by the driver.
Uninsured motorist coverage is a more recent type of auto policy addition which is used to make the auto policyholder whole should they incur any kind of damage to their person or vehicle that results from another driver being at fault but not having auto insurance. Even though automobile insurance is legally required by law there are still individuals who drive without the proper coverage. Depending on the circumstances, not having uninsured motorist coverage may mean you have to look for toward other avenues to receive compensation for automobile repairs or damage to your person.
Because of the various types of coverage offered for automobile insurance make sure you're selecting the best insurance options that suit your situation. If you're driving a 20 year old vehicle that already has dents and scratches you may find you don't need comprehensive and collision insurance coverage because it may be cheaper to purchase another vehicle. If however, you're driving a brand new expensive sports car you would probably want full coverage in the event anything happens as the cost of replacing or repairing may be too expensive without the proper coverage.