Auto insurance is one of the most important investments that a driver can make. Why? A properly insured driver can save thousands of dollars after they’ve been in an accident. There are many drivers, however, who don’t understand exactly what auto insurance does-and therefore, they choose not to buy any.

What does auto insurance pay for? The primary purpose of auto insurance is to help protect a driver that is involved in an accident for which they are at fault. In other words, an accident that they caused. This includes accidents caused by reckless driving in inclement weather, speeding, running a red light, a crash resulting from a vehicle malfunction…the list goes on and on. These kinds of accidents can result in thousands of dollars of damages to their vehicle, the other vehicle(s) and the public and personal property that may have been involved. Repairs in this case usually need to be made quickly, and most people don’t have this kind of money lying around.

Auto insurance will also help pay for the medical expenses of the other driver. Emergency room care following an accident can cost upwards of five hundred dollars, particularly if x-rays or MRIs are needed or bones need to be set and cast. Again, most drivers cannot afford to pay five hundred dollars of another person’s expenses. They usually have enough of their own! An auto insurance company will pay a portion of their expenses, the amount of which is determined by the driver when they purchase their policy.

When a driver purchases a policy they will also have the option to add comprehensive and collision insurance. Comprehensive insurance will pay for damages to the driver’s vehicle if it’s damaged as a result of a natural event-a flood, or a hurricane. Most people are not aware that their collision insurance doesn’t cover these events until it’s too late.

Collision insurance pays for the damages to the driver’s vehicle if they are responsible for an accident. Liability coverage will pay for the damages they cause, but they are going to be responsible for their own repairs. Collision will help pay for these repairs, and if the car needs to be totaled (meaning that the damages to the car are greater than the car’s estimated worth) the insurance company will reimburse the driver the full Blue Book Value of their vehicle. An auto insurance policy may also provide coverage for the rental of a vehicle, minimizing time lost as a result of a lack of a vehicle.

Finally, some auto insurance policies will provide a secondary medical and life insurance to provide for the driver’s medical bills, time lost from work and, in the event that an accident proves fatal, life insurance for the driver’s family. It may also include a condition which allows for a victim to receive in-home care if it proves to be necessary, a vital concern for drivers who may become disabled as the result of an accident but do not have adequate medical coverage.

Auto insurance is vitally important for drivers, preventing them from being forced onto the brink of bankruptcy following an accident. With the multitude of companies offering auto insurance around the globe, there should be no reason for any driver to continue driving uninsured.