Quite a few car owners feel the pinch of paying their auto insurance premium every month when they don’t see any immediate benefits of the same.
If you’re a new car owner or never filed a claim for your car, it can be very frustrating to keep paying monthly insurance premiums without really getting anything in return.
However, in reality, car insurance has many benefits. Here are some points for you to ponder over.
Car Insurance is for Financial Protection
Nearly every state in the United States makes it a must for all car drivers to purchase car insurance with PLPD.
PLPD is an auto-insurance jargon that stands for Personal Liability and Property Damage.
When car insurance covers PLPD, it protects you from the following liabilities.
Depending on the auto insurance and the state you live in, your car insurance protects you against any future unforeseen financial liability in the event of an accident.
Remember – if you’re driving a car, you cannot rule yourself out of committing a fault in an accident.
When you are at fault, and others suffer minor or major bodily injuries, they will come after your insurance company for adequate compensation.
However, if your current auto insurance policy is inadequate for compensation pursued by the victim, then you’re liable to pay the rest of the compensation.
Even though PLPD doesn’t cover damage to your car, it still protects you from any potential lawsuits. Imagine yourself in such a scenario without auto insurance, and you can appreciate the financial liability you would drive around with.
Car Insurance is for Physical Damage Repairs
Aside from PLPD, auto insurance typically covers damage to your car in the event of an accident although the coverage may vary depending on your state as well as the type of policy you choose.
The point is auto insurance essentially pays for the damage repairs in the event of an accident. So, when your car is insured, you drive around knowing it’s protected against potential damage.
Car Insurance is NOT for Mechanical Repairs
Many people believe car insurance should cover the regular repair works.
However, that’s not what insurance policies are supposed to do. Auto insurance is engineered to protect your car from any “accidental damage” arising out of factors beyond your control, e.g., vandalism, fire, or collision. It cannot pay for regular auto maintenance or repairs.
The Bottom line
Car insurance is not an investment – it’s not supposed to pay you back with interest. However, it protects you from potential financial liabilities that can hurt you if you were at fault in an accident. Auto insurance not only protects your interests; it also protects the interests of other drivers on the road as well.