Whether you’re getting on the road for the first time or are purchasing a new vehicle, getting auto insurance to go with it is an essential part of the process. Make sure that you pick up a policy that matches your needs.
What Is Auto Insurance?
Auto insurance is the overarching term for a wide variety of policies that help protect different vehicles that you may own, ranging from your basic family car to:
- Convertibles
- ATVs
- Motorhomes
- Commercial Vehicles
- Motorcycles
There is even insurance available for boats and other aquatic vehicles, should you happen to own one. In exchange for paying your premium on a monthly basis, auto insurance will allow the company you work with to pay your losses in the events of accidents or theft. For example, if your car is stolen and you have insurance for theft, you will have some money to compensate for the loss of your vehicle. If you get into an accident, depending on the nature of your policy, you will not only be compensated for property damage to your car, but also the medical costs or rehabilitation costs that you may incur as a result of injury. If you pay for liability as well, you will also be covered in case you have a legal responsibility for some else’s injuries or car damage.
Note that a personal auto policy will not apply if you are using your vehicle for commercial purposes, like delivering food or other items, or participating in a ride-sharing service. However, some insurers offer supplemental policies that will provide added coverage for ride-sharers.
As one added note, you may also want to look into gap insurance. Typical policies tend to cover the market value of a car versus what you paid for it, and since new cars tend to depreciate, there may be a “gap” between what you owe on your car and what your insurance covers. Look into gap insurance if this situation may apply to you.
Why Do You Need Auto Insurance?
For one thing, base auto insurance that covers damage that your car may cause is mandated by law, so at the very least, you should factor this cost in when budgeting for a vehicle. However, there’s also plenty of reasons to take a step further and make sure that you buy coverage for your own car. For example, if you are a person who does a lot of commuting, suddenly losing your car due to theft or an accident could instantly impact your earning power. Having a comprehensive insurance policy will take off some of the financial burden so you can get another vehicle and get on the road right away. In addition, if you are in a serious accident, proper auto insurance can help with your medical bills.
If you are looking to understand more about auto insurance and what your best options are, be sure to consult with your local insurance company right away. The professionals there can help guide you to the best policy for your circumstances.
