What are the benefits of auto insurance?
The most significant benefit of car insurance is that it will cover your medical bills and repair costs after an accident. Below we'll cover a few more benefits and why it's advantageous to have auto insurance.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Oct 18, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 18, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Auto insurance protects your property and helps cover damages after an accident
- Minimum liability auto insurance is required in nearly every state
- Some lenders will also require full coverage and GAP insurance on auto loans
Car insurance provides protection when you drive. Your car insurance policy covers you, your vehicle, and your passengers in the event of an accident or natural disaster.
If there is an accident, your insurance company will pay for damages covered by your policy. However, you will be responsible for these costs out of pocket if you don’t carry the right type of coverage.
Carrying the state minimum liability auto insurance is the law, but how much car insurance do you need? Keep reading to learn the advantages of having the right kind of car insurance and where you can find the most affordable auto insurance rates in your state.
Then, enter your ZIP code above for car insurance quotes from top companies in your area.
Why do you need car insurance?
There are many car insurance benefits, and most will keep you out of trouble with the law. In most states, you need to have car insurance because it’s the law. The amount of car insurance coverage required will vary by state, but you’ll likely need to carry at least liability coverage to drive your vehicle legally.
Without liability auto insurance or personal injury protection, you could be looking at high medical bills, court fines, and civil liabilities if someone is injured or killed in an accident you caused. Failing to have insurance at the time of an accident could also result in felony charges if DUI or reckless driving are involved.
Other benefits of car insurance include protection from uninsured drivers and hit-and-run accidents.
For example, say you were injured in a major accident where the other driver drove away before you could exchange information. If you carry full coverage car insurance, your injuries and vehicle damage would be covered by your policy.
Unfortunately, your auto insurance rates will go up every time you file a claim and use your car insurance.
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What kind of car insurance do I need?
The different types of auto insurance coverage can be broken down into three categories:
- Insurance required by your state
- Insurance required by your car lender
- Optional insurance coverage
State insurance laws determine the required amount of coverage. For example, most states require liability auto insurance, but some states require additional personal injury protection (PIP) or medical payments coverage (MedPay).
However, if you are leasing or still making payments on your vehicle, you are required to carry more coverage by your lender.
Most banks and lending institutions require full coverage and GAP insurance on auto loans. Full coverage car insurance protects your vehicle in accidents, natural disasters, theft, and vandalism, while GAP insurance coverage pays for the remaining amount on the loan if the vehicle is totaled.
Optional insurance coverages aren’t required by law or a loan, but you may choose to add them if you drive a newer vehicle, have younger drivers on your policy, or live in a high-risk area.
The most popular optional insurance add-ons are the following:
- Roadside assistance
- Glass protection
- Collision
- Comprehensive coverage
Collision and comprehensive coverage are considered optional because they aren’t required by law.
However, if you want to be protected from all kinds of risk, you will want to carry collision and comprehensive add-ons in a full coverage policy. This will raise your auto insurance rates, but it will save you money in the event of an accident.
How much does car insurance cost?
The biggest disadvantage of car insurance is the cost. However, you can lower your auto insurance rates by shopping online with multiple companies. This will allow you to compare different rates based on your driving record and the kinds of discounts available to you.
To get started, take a look at how much the top 10 companies charge for auto insurance based on driving records.
Average Annual Auto Insurance Rates by Driving Record
| Companies | Average Annual Rates by Clean Driving Record | Average Annual Rates With One Accident | Average Annual Rates With One DUI Conviction | Average Annual Rates With One Speeding Violation |
|---|---|---|---|---|
| USAA | $1,933.68 | $2,516.24 | $3,506.03 | $2,193.25 |
| Geico | $2,145.96 | $3,192.77 | $4,875.87 | $2,645.43 |
| American Family | $2,693.61 | $3,722.75 | $4,330.24 | $3,025.74 |
| Nationwide | $2,746.18 | $3,396.95 | $4,543.20 | $3,113.68 |
| State Farm | $2,821.18 | $3,396.01 | $3,636.80 | $3,186.01 |
| Progressive | $3,393.09 | $4,777.04 | $3,969.65 | $4,002.28 |
| Travelers | $3,447.69 | $4,289.74 | $5,741.40 | $4,260.80 |
| Farmers | $3,460.60 | $4,518.73 | $4,718.75 | $4,079.01 |
| Allstate | $3,819.90 | $4,987.68 | $6,260.73 | $4,483.51 |
| Liberty Mutual | $4,774.30 | $6,204.78 | $7,613.48 | $5,701.26 |
Auto insurance quotes can vary by thousands of dollars between companies, so it can pay to shop around with at least three different insurers to see which can offer you the most competitive rates.
What are the biggest advantages of car insurance?
Is car insurance required? Yes, but even if it wasn’t, the advantages of car insurance far outweigh the disadvantages.
Here are the top three reasons why you need auto insurance:
- Personal accident coverage. Insurance covers damages to your vehicle and medical bills and ensures reliable transportation.
- Third-party liability protection. Insurance protects you from at-fault accidents and uninsured or underinsured drivers.
- Affordable insurance is available. You can save money on auto insurance by remaining claim-free, adding discounts, and tracking good driving habits with usage-based auto insurance.
There are numerous additional advantages to having car insurance, so make sure you protect yourself and your vehicle with the proper coverage.
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The Advantages of Car Insurance: What You Need to Know
If you’re unsure how much car insurance you need, start with your state minimums and then consider whether adding more coverage to your policy would be a good choice. Keep in mind that your auto loan or lease agreement may require you to carry additional coverages.
Fortunately, you can compare coverage options with multiple companies online to find a policy that fits your budget. We recommend comparing three different insurers to get the most accurate auto insurance quotes.
Enter your ZIP code below to access car insurance quotes from multiple companies today.
Frequently Asked Questions
What are the main benefits of having auto insurance?
The five main benefits of auto insurance include:
- Financial protection
- Liability coverage
- Medical expenses coverage
- Theft and vandalism protection
- Peace of mind
Are there any legal requirements for auto insurance?
Yes, in most countries and states, having auto insurance is a legal requirement. The specifics vary depending on your jurisdiction, but typically, you are required to have at least liability insurance that covers the minimum amount of bodily injury and property damage liability mandated by law.
Can auto insurance help me during accidents?
Absolutely. Auto insurance is designed to provide financial assistance when accidents occur. Depending on the coverage you have, your insurance can help cover the cost of repairing or replacing your vehicle, medical expenses for injuries sustained, and legal expenses if you are sued by another party involved in the accident.
Does auto insurance cover vehicle theft?
Yes, most comprehensive auto insurance policies cover vehicle theft. If your vehicle is stolen, you can file a claim with your insurance company to receive compensation based on the coverage limits specified in your policy. It’s important to review your policy to understand the extent of coverage for theft and any applicable deductibles.
Can auto insurance help with hit-and-run incidents?
Yes, if you have comprehensive or uninsured/underinsured motorist coverage, your auto insurance can help with hit-and-run incidents. Comprehensive coverage typically covers damage to your vehicle caused by unknown drivers, while uninsured/underinsured motorist coverage can provide protection if you are injured or your vehicle is damaged by a hit-and-run driver.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.