Why Do We Even Have Car Insurance?

A lot of people view car insurance as that coverage to fix or replace your car if it gets damaged in a crash. While this is certainly a one aspect of car insurance, the primary function of car insurance is actually to provide liability protection. Liability coverage safeguards and your family against the legal damages that can arise from accidents you or someone using your vehicle may cause.

Perhaps the most important part of auto insurance coverage, however, is uninsured and underinsured motorist coverage. This is the coverage that protects you and your family if you are injured in a crash that someone else causes, but for which they either don't have insurnce, or don't have enough insurance. Liability insurance protects other drivers if you cause a crash. Uninsured and Underinsured protectes you if someone else causes a crash.

At its core, liability insurance is designed to cover the damages and injuries inflicted on others when a driver is at fault in an accident. This means that if you cause a crash, your insurance will step in to cover the medical expenses, property damage, and other harm resulting from a crash you are claimed to have caused--up to your liability limits, of course. More importantly, your insurance company will hire a lawyer to defend you in the lawsuit--at the insurance company's expense.

However, even the most cautious drivers cannot control the actions of others on the road. This is where uninsured and underinsured motorist coverage becomes invaluable. Uninsured motorist coverage steps in when an accident is caused by a driver who does not have any insurance. Conversely, underinsured motorist coverage applies when the at-fault driver has insurance, but their policy limits are insufficient to cover the full extent of the damages. In both scenarios, these coverages treat your insurance policy as if it were the other driver’s insurance, up to the coverage limits of your own policy.

Many drivers mistakenly believe that they do not need much uninsured and underinsured coverage, and some will waive it entirely, beliving it's an unnecessary expense. This can be very short sighted. This overlooks the fact that no matter how safe a driver you may be, you cannot control the driving of others. Accidents can happen at any time, and the consequences can be severe. I've seen too many people harmed badly in a crash they didn't cause, only to regret that they didn't have enough insurance coverage on their vehicles.

Talk to your insurance agent. Call around to find the right plan for you. You may be surprised to learn that increasing coverage limits is more affordable than tyou might expect, especially after reaching a certain threshold of coverage. Take a few minutes to review your policy with a trusted insurance agent or lawyer, to make sure you and your family are adequately covered.