Who needs to purchase this type of insurance?

In most states, anyone who wishes to drive his or her vehicle on the roads and highways must purchase car insurance. If you are independently wealthy and can purchase a surety bond, you may be able to disregard this expense. However, most people cannot afford to do this.

How does auto insurance work?

Most states require that you purchase bodily injury liability insurance and property damage liability insurance. This coverage will pay the medical bills and property repair bills for the people injured and the property damaged in a collision that you caused.

The different types of car insurance

Collision coverage would benefit you if you need to purchase insurance that will cover damages to your vehicle that occur in a collision that you have caused. It also covers you if your vehicle rolls or flips over.

You may also purchase uninsured/underinsured motorist insurance. This pays for the damages caused by someone without the required liability insurance. Gap insurance will help you pay your loan if your new vehicle is stolen or totaled. When your car is totaled, your insurance company can only offer you the actual cash value of the vehicle, but you will owe more than that amount at this point. This type of insurance will cover the gap between the amount that your insurance company will offer you and the amount that you owe the lender.

You can also purchase comprehensive coverage that will cover your property damages that result from something other than a collision. For example, if you run into a tree or your car is damaged by hail, this type of car insurance will pay for the damages.

Major benefits

The major benefit of car insurance is that you will have the means to pay medical bills and auto repair bills in the event that you are involved in a car collision. The other benefit is that you will not be cited for driving without car insurance.