Car Insurance and the Law

No matter what you drive, whether it is a passenger vehicle or exotic sports car, one thing is for certain in almost every municipality the law requires you to have vehicle insurance. Obviously owning a vehicle requires responsibility, but besides being a responsible driver, you also need to protect your investment and protect yourself from litigation due to an accident, personal injury or property damage that your vehicle can be involved in. This is the major function of insurance- to protect you from financial ruin.

What Type of Insurance Do I Need

Every municipality is different, however for those that live in the United States, generally speaking most vehicles allowed on public roads require liability insurance to protect against personal injury and property damage. If your vehicle is either financed or leased, you also need additional insurance due to the fact that you don’t own the vehicle until all payments have been made. For a leased vehicle and financed vehicles usually collision insurance and comprehensive insurance is required. Collision insurance usually protects your vehicle in the case your vehicle is involved in an accident. Comprehensive insurance protects your vehicle generally from fire and theft and other unforeseen events damaging your vehicle. It should be noted that there are plenty of other types of insurance available that are not necessarily required by law, but may be a good investment, such as uninsured/underinsured driver, medical liability insurance to pay for health costs related to an accident and more.

The Cost of Insurance

For most drivers the cost of insurance can be quite expensive. Insurance costs take a wide variety of factors into consideration to come up with a yearly cost. For instance, your age, the location you live or drive in, the type of car, driving record and more.

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