Auto insurance is mandatory in most states. If you live in one of those states, then you must have coverage unless the vehicle is unregistered and inoperable. You might even have to surrender your tag so the insurance obligation can be dropped. Otherwise, you have to obtain at least the minimum coverage amount required by your state.
The purpose of mandatory auto insurance is to protect everyone on the road. It provides financial support for accident victims so that they can pay accident-related expenses.
Each policy specifies a deductible and the amount they will pay for a specific event. You might have coverage that pays in the event of vandalism. Or maybe you have coverage that pays if you hit an inanimate object. But you must pay the deductible before the insurance company will contribute. Deductibles range from $250 to $2,500 or more. If that’s too much, then you can pay higher premiums in exchange for a lower deductible.
Liability, collision, and uninsured motorist are a few types of policy available. Liability is general coverage, and the most basic available. It pays when you are liable for the accident. If auto rental coverage is included, then it pays for a rental car while the person waits for the auto repairs. Uninsured motorist covers you in the case the other person does not have enough coverage. The benefit of coverage is that you will meet the requirement that all drivers have coverage.