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What is the purpose of auto insurance?

While car insurance can provide various benefits according to what the motorist's needs are, the main purpose it serves is to keep a policyholder out of legal trouble. Federal and state law dictates that in order to drive legally, a motorist must have a policy that meets a state's required minimums. If you are caught driving without insurance, the consequences can reach as far as the revocation of your license. Car insurance is there to ensure that if you are involved in an accident, you will be provided for financially for any injuries or property damages you incur. It serves as a barrier to protect you from financial loss due to the expenses that come from being involved in an automobile accident. You can maintain the proper amount of car insurance to keep you out of legal trouble while still working within the confines of your budget. 

The financial hardships you can incur from an automobile accident can have dire consequences for you. For most people, a car is their main mode of transportation. The loss of this can provide difficulties in driving to and from work or school. The added stress of having to pay for your medical care can cause much worry. Auto insurance is there to allot for funds that would not otherwise be readily available.

The most common form of coverage a state requires is liability insurance. Liability insurance provides monetary compensation for medical expenses and property damages to another motorist if you are found to be at fault in an accident. By allowing the insurance provider to assume the responsibility of these costs, you can achieve your own personal peace of mind. 

Most motorists opt to purchase more than the required monetary amounts of coverage in order to provide further protection of their property and resources. If your insurance minimums do not meet the total cost of another motorist's expenses due to an accident, you will be held liable to pay the remainder of the balance. In the event that another motorist incurs a permanent disability or even death, the maximum monetary amounts of an ordinary policy will probably be insufficient to cover the costs associated with the trauma.

Comprehensive insurance is a common additive to an insurance policy. It adds as a supplement to collision insurance. This type of policy provides for coverage in the event that your vehicle suffers damage from an act of nature or a criminal act. This can include collisions, weather damage, or vandalism. The deductible you choose upon purchasing your policy will be due at this time. 

The purposes of different types of coverage are varied. The different types of policies are available to you to enjoy their benefits. There are different add-ons you can include in your policy to cover every conceivable sort of damage your vehicle may or may not incur. For example, a rider can be added to your insurance policy to cover the glass in your car. If your windshield should crack or if a window is broken due to criminal mischief, the rider will allow your insurance company to pay for the cost of the repair. Proper education and research will allow you to thoroughly analyze your situation and determine what coverage you will require to meet your needs.


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