The Importance of Car Insurance

Why is Car Insurance Important?

Protecting Yourself & the People Around You

In a world that can be extremely unpredictable, most people are pretty cautious with ways in which they can be protected. Whether that protection comes through something as complex as insurance policies (life, health, auto, home) or something as simple as putting your seatbelt on every time you get into the car and locking your door every time you leave your home. We as a society always try to protect ourselves from the unexpected, and because of this auto insurance is extremely important. From the website Driver Knowledge, there are approximately six million car accidents per year and approximately 3 million people are injured and about 90 people die in accidents everyday. With numbers like these, it is important to make sure that you have some sort of backup plan if something were to happen to you or to the passengers in your car. So when it comes to your auto insurance plan, it is important to look at all aspects of it and make sure that you can talk to someone who can easily break it down for you. 

So why exactly do you need auto insurance? Auto Insurance is mandatory in 49 out of 50 states, and each state has their own “mandatory minimum” qualifications for your auto plan. In the state of New Hampshire, the only state that does not require auto insurance by law, you would need to have financial records that show you can be held financially responsible if you were at-fault during a collusion of some sort. And even though each state requires their own mandatory minimum, while traveling to different states, the driver is protected by Article IV, Section 2, Clause 1 of the constitution.  Article IV states that no other U.S. state can treat other citizens [of a different U.S. state] in a discriminatory manner of any sort. So in this case, the state of Pennsylvania could not punish someone from the state of New Hampshire for not having auto insurance. 

Also, if you were to ever get caught driving without being insured, you could receive six to eight penalty points on your license and you could be fines or disqualified from driving. The main point for car insurance is to be able to be held liable if you cause any sort of property damage or bodily damage; you do not need to have insurance for vehicle damage if you do not want to, but it is definitely a great thing to have. But of course this varies from state to state. Auto Insurance provides property, liability and medical coverage. The property coverage on your car covers if your car becomes damaged and even if it gets stolen. Liability coverage is the legal responsibility of others for bodily injury and/or any property damage that has occurred. Last, but not least, auto insurance also includes medical coverage, which treats injuries, rehabilitation and sometimes even lost wages, and if worse comes to worse, it can also cover funeral expenses. But this also depends on how much coverage you have. The amount of coverage that you have will determine the amount of money you could receive to put towards either medical bills, or car repairs, or even a car replacement. 

 Minimum Amount of Coverage Needed & Other Things to Know About Auto Insurance in PA

• $15,000 bodily injury per person, 
• $30,000 bodily injury per accident, and 
• $5,000 property damage per accident
• Average amount paid per year in PA is $630–average is 4% cheaper than national average
• Tort Option, full or limited—What is a “Tort Option”? This will determine the policyholder’s right to sue another driver for pain and suffering. Limited restricts the right to sue for non-monetary damage except in extreme conditions ( death or permanent injuries) in return for a lower premium. Full means you can sue for any post-accident related pain and suffering, but this usually comes with a greater overall premium
• PA is also a “no fault” state—this means that no matter who is responsible for the accident, it is your insurance company’s bill to pay

**Fun Fact: Car Insurance is most expensive in Philadelphia and cheapest in State College**

One more important thing to know about your car insurance is that the mount of insurance needed varies from person to person. This especially applies if you are leasing/making payments on a car. If this applies to you, then you are required to carry higher levels of insurance vs someone who owns their vehicle [no longer making payments].