Why Auto Insurance? Comparing Costs of Accidents With and Without Insurance

Getting into an accident without car insurance can really add up. The argument is that if you don't get car insurance and don't get in an accident you end up paying nothing. Besides the fact that every state in America has regulations in place that mandate minimum amounts of insurance coverage, it's still not a good idea to risk it. Some states have jail time and large fines if you're caught driving without insurance, so it's always a good idea to have at least a minimum policy in place. Let's look at the scenario of getting into an accident without insurance.

If you get into a car wreck without an insurance policy in place, and it's your fault, you are personally liable for all damages that occur. This means the damage to your car, the damage to the car or cars you hit or that hit you, damage to other property that is not the car, and medical bills from injuries sustained by you and others as a result of the accident. These can add up to tens of thousands of dollars. Not to mention that you will have to pay fines and potentially serve time in jail for not having insurance in place. In some states your license will be suspended or revoked, and you'll have to appear in court to explain your actions.

So as you can see, getting into an accident can result in thousands and thousands of dollars in damages, court fines and costs, medical bills, and lawsuits. Of course, if it's just a small fender bender you might be able to have the other person agree to just make repairs and you'll pay for them. But a large accident, one with serious damage, totaled cars, and injuries will be a financial disaster that you may not recover from.

When you have the proper car insurance in place you will be covered for damages in accidents you cause. You will only be responsible for paying the agreed upon deductible. Your insurance company will pay for everything exceeding this amount. The other person's insurance will cover you in instances where they're at fault, unless you're in a no-fault state. You can also get collision insurance which will make sure you are protected regardless of whether or not the other person is insured.