Why is it good to have auto insurance and what are the repercussions for not having any?

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Asked October 3, 2011

1 Answer


If you are listed as a safe driver because you haven't had any accidents, it may seem that auto insurance is a waste of your money. The truth is that even after years of paying for insurance you haven't used, a single accident can more than make up for all the premiums you have paid in, not to mention the fact that auto insurance is a legal requirement for driving on public roads.

As one example, suppose you hit a Jaguar, totaling it out. Without car insurance, you would be responsible for paying for the replacement of the vehicle, amounting to tens of thousands of dollars that a single instant in time could cost you. And if more than one car was damaged by the accident, you could be looking at damages and repairs for other people's cars that easily add up to more than your annual income.

As another example, one of the types of insurance most states require is personal injury liability coverage. This type of insurance pays for the medical needs of people you injure in an accident. As the cost of medical services has increased, the ability of the average person to pay for injuries out of pocket has become almost impossible. A single person hurt in an accident could cost thousands of dollars easily, and if multiple people are injured you could be forced to sell your home or other property just to pay for their medical care. Having car insurance gives you a blanket against someone putting a lien against your property or being forced to sell it just to pay the needed medical bills.

Finally, car insurance is now required in every state, and most states belong to a network that requires reporting lapses and cancellations of car insurance. If your insurance lapses, you could have your license suspended, your vehicle registration revoked, or even be required to serve jail time if you are convicted of driving without coverage. With all of these things taken into consideration, it is easy to see how having car insurance outweighs not having it.

Answered October 3, 2011 by Anonymous

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