Like with other types of insurance, car insurance is a legal contract between you and a car insurance company. It is a contract that specifies level of insurance coverage that the insurance company undertakes to shoulder so long as you remain up-to-date on premium payment. The purpose of car insurance is in three fold; to provide financial protection in case of physical damage/body injury resulting from traffic accident and liability that may arise from such accidents.
There are also some car insurance policies in some countries that provide financial protection against theft of your car and damages to the car not necessarily resulting from traffic accidents. Different jurisdictions have different car insurance regulations. However, every jurisdiction has minimum level of coverage that both citizens and visitors who drive need to have.
While it might seem economical not to incur expenditure through payment of car insurance premium, driving without car insurance cover can be counter-productive. This is so because of the many risks that comes with driving. You not only present risks to other motorists and road users as you drive; you also face several risks. Below are top three reasons to get car insurance:
1. Financial protection – This is one of the top 3 reasons to get car insurance. While driving has its risks, driving without car insurance is more risky. Getting involved in a traffic collision where the other party gets injured and you are blamed for the collision can leave you financially vulnerable. This is because you will be obligated to meet medical and other costs out of your pocket, which can be very expensive. Note also that however diligence care you take while driving, the possibility of being hit by another motorist is there, in which case you will also be obligated to meet your medical costs out of your pocket. Having car insurance in such a case takes care of most of the expenses.
2. Traffic penalties – This is one of the 3 reasons to get car insurance. Minimum car insurance is mandatory in almost all jurisdictions. Driving without car insurance is therefore illegal and therefore a traffic offence, which attracts penalties. The penalties are indeed severe in some countries because you can have your driving license withdrawn altogether and never permitted to drive again.
3. High car insurance premium rate – This is the last of 3 reasons to get car insurance. Car insurance companies take into accountseveral factors when calculating car insurance rates. One of these factors is type of driver. The companies categorize drivers into different categories and being caught driving without car insurance literally means you are a risky driver and therefore charged high premium rate, which can be very costly in the long run.
The need to get car insurance is not in doubt. It is better to be protected when driving than driving without cover at all.