Home News Economy What is Car Insurance and Why Do You Need it?

What is Car Insurance and Why Do You Need it?

Car Insurance

As much as every car owner would love to drive without paying hundreds of dollars for insurance every year, this is not legally possible. Car insurance is mandatory for every driver and there’s a way to get around it.

Your car insurance provides legl and financial protection in the event of a road traffic accident. Some insurance plans also cover other drivers and pedestrians that may be involved in an accident with your vehicle.

In this article, we’ll cover why you need insurance and which factors contribute to the price of your auto insurance. We will also cover the different types of coverage so you can decide which is the best car insurance option for you.

 Car Insurance
Car Insurance

Why Do You Need Car Insurance?

By law, every driver needs to be covered with active insurance from the moment they own their car. The minimum amount of coverage is third-party insurance, but you can get higher levels of coverage based on your needs.

Auto insurance provides protection for you, other drivers, passengers, and pedestrians. In the event of an accident, your insurance company will help to cover some of the associated expenses.

Car insurance companies may cover the costs of repairs on your vehicle and the other driver’s vehicle or medical bills to cover the injuries you or others sustained in the accident. This is particularly helpful if you’re in an accident that is not your fault, o you aren’t paying a fortune fixing damage caused by other drivers.

Driving without insurance can lead to a hefty fine and points on your license. In some cases, you may get your driving license revoked and you will be unable to drive for the foreseeable future.

What Factors Determine the Price of Your Car Insurance?

The specific price of your insurance depends on a wide range of different factors. Each year, your insurance may rise or fall based on the events of the previous year.

The best way to keep your insurance as low as possible is to drive safely and avoid getting any claims on your car. However, there are lots of other factors that contribute to your quote, such as:

  • Your age
  • How long you’ve been driving
  • The type of car you are driving
  • Amount of coverage
  • Voluntary excess 

What Are the Different Kinds of Car Insurance?

There are three main levels of coverage when it comes to car insurance.

  • Third-party – this is the lowest level of coverage. It covers the costs of any damage that you have caused to the vehicles or properties of other drivers or motorcyclists.
  • Third-party, fire, and theft – this option covers any damage that you cause to other people but not damages that you have sustained. But it will cover you in the event of your car being stolen or set on fire. 
  • Fully comprehensive – this option offers the highest amount of coverage. Because of this, it’s usually the most expensive level of insurance that you can get. It covers you, your vehicle, and other drivers that are involved in the incident. It may cover any expenses for repairs on your vehicle, medical bills, and even vandalism to your car.