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August 30th, 2017

Car Insurance Guide: Why You Need it and What it Covers

This article is the first in a series of three blogs posts covering the topic of car insurance. 

If you own a vehicle, you know that obtaining insurance is a big deal.

Unfortunately, it’s not as easy as going to the convenience store and picking something up off the shelf.

There’s a lot for you to consider and you may get a little overwhelmed at the thought of beginning the process.  

First things first, let’s talk about why you need to have insurance at all.

Why you have to have it

There are three main reasons that you need to buy car insurance.

  • To obey the law. Each state has their own laws regarding insurance, but they all one thing in common—you have to have it. In Arizona, if you don’t comply, you could be required to pay hefty fines and your vehicle may be towed to an impound lot.
  • Your loan company says you have to. If you borrowed money in order to purchase your car, the bank or lender wants to protect their investment. If you fail to buy insurance, your loan company may purchase it and pass the cost along to you, which will be much more costly than what you’d buy on your own.
  • To safeguard your property. If you’re ever in an accident for which you are at fault, insurance can cover things like bodily injury and property damage liability coverage for the other person’s injuries and vehicle. If you’re sued, liability insurance will cover the cost of an attorney to represent you. The amount of coverage that your state requires of you is usually not enough to cover everything, such as medical bills, lost wages or repairs to your car  –  though that coverage is available and is desirable to hold.

Grab these 5 Insurance Tips for Arizona residents to get more help with choosing the right protection you need.


What it covers

There are a wide variety of coverages from which you can choose, above and beyond what’s required. You’ll need to decide what kind of policy best suits your needs and make your purchase accordingly. It can be confusing so it’s wise to seek the advice of a reputable insurance agent who can explain things in detail.

Here’s what your policy may cover:

  • Bodily injury liability. This is required by state law and covers injuries that you cause to someone else. You’re covered even when driving someone else’s vehicle  –  as long as you have their permission to drive it.
  • Property damage liability. This is also required by state law and pays for the damage that you may cause to someone else’s car or objects or structures your car hits.
  • Uninsured and underinsured motorist coverage. As required in Arizona, this coverage reimburses you if you are hit by someone who doesn’t have insurance or who commits a hit and run. It also covers you in the event the other person doesn’t have enough insurance to cover your damages.
  • Medical payment protection. Also required by the majority of states, this will cover your and your passengers’ medical bills that result from an accident.
  • Collision. This coverage is required by your lender if you have an auto loan. It covers damage to your car from a collision with another car, an object, hitting a pothole or from flipping over.
  • Comprehensive. Also required by your lender, this pays for damage that’s done to your car that isn’t the result of a collision. It includes hitting an animal, weather-related incidents, and damage to your windshield.

Most auto insurance companies will also offer you coverage for rental cars or towing for an additional premium.

Get some help

Get in touch with a trusted insurance agent to go over your options with you and help you choose the coverage that suits your needs.

Do you carry the proper amount of coverage on your vehicle?