happy family with little child driving in carAt first, searching for the right car insurance may seem intimidating, but it’s in your best interest to make the right insurance decision. If you use your vehicle on public roads in any capacity, car insurance may be mandatory. You have the ability to choose the type of insurance that best fits your needs and finances. Let’s take a look at some of the reasons and benefits of holding a policy.

Car insurance may be mandatory.

Auto insurance is generally required by law for most states. If you’re financing or leasing your vehicle, your lender or leasing company may also require it. Your car insurance policy can also help protect you from the cost of repairs if you get into an accident.

Protect your pockets from potential hardship.

Car insurance helps protect you from losses arising from the use of your vehicle. It covers medical expenses, damage to your vehicle and other cars, and additional costs that may emerge involving your vehicle. Car insurance can also cover damage to property (other than your own car) or bodily injury caused by a collision with a deer or another animal in some states.

Lender: “No insurance, no vehicle.”

When you finance a car, the finance company requires that you have car insurance before giving you a loan for the vehicle purchase price plus interest. Insurance passes the responsibility to the owner of the loan. Thus, allowing the driver to leave the lot with the assumption any damages done do not fall on the lender. The same applies if someone borrows your vehicle and causes an accident with no one at fault (no one else was involved).

Most drivers don’t consider how much any particular car insurance policy will cost until after they’ve had an accident. Once you have a major accident and discover that you need a lot of repairs — or if your vehicle is totaled — your focus may shift toward car insurance rates. But, if you review and compare car insurance rates before you buy a new vehicle or before you add a teenage driver to the family policy, you’ll be better able to judge the full impact of your choices on your monthly budget after it’s time to pay premiums.

If you drive, you need car insurance. It’s that simple. It protects you financially in the unfortunate event of an accident or other event that renders your vehicle unusable. If you finance a car, your lender will require car insurance first before they give you a loan. So make sure to not only purchase auto insurance but also to maintain it by making payments on time and reporting any changes to your policy.