7 Benefits of Auto Insurance

1. Offers Financial Protection if You Cause an Accident

Having a car accident without auto insurance can be expensive, especially if you're at fault. The average cost of a car accident not involving injuries is $6,100 per vehicle, according to the National Safety Council. If someone is injured (or worse), costs can be much higher.

Source: National Safety Council. An evident injury is a minor injury that is visible at the scene of a crash but is not fatal or serious, while a possible injury is one that isn't visible.

Liability insurance, required in every state but New Hampshire, protects you financially if you cause a car accident that injures or kills someone or damages their vehicle or property. Liability insurance covers:

• Medical expenses for the other party
• The other party's property damages, such as damage to their car, fence or mailbox
• Lost wages if the other party can't work due to injury
• Funeral expenses for other parties killed in the accident
• Your legal fees if you are sued

For extra coverage, you can add umbrella insurance, which kicks in if your liability for a car accident exceeds the limits of your auto liability coverage.

2. Helps Cover Medical Costs for Yourself and Your Passengers

If you or your passengers are hurt, personal injury protection (PIP) or medical payments coverage (MedPay) can help. PIP and MedPay cover medical expenses for you and your passengers if you're injured in an accident, regardless of who caused it. PIP may also pay other accident-related expenses, such as funeral costs or lost wages.

If another driver caused the accident, their liability insurance should cover your medical costs, but this could take a long time to pay out. With PIP or MedPay, you and your passengers can get medical care right away. This coverage can also be helpful if your health insurance doesn't fully cover your medical care.

Learn more: What Is the Difference Between PIP and Liability Coverage?

3. Keeps You in Compliance With State Law

Except in New Hampshire, drivers in every state and the District of Columbia must carry a minimum amount of auto liability insurance to drive. (New Hampshire drivers must prove they're financially able to cover the cost of a car accident if they don't have insurance.)

In addition, 19 states and the District of Columbia require uninsured motorist coverage; 14 of these require underinsured motorist coverage too. Some states require personal injury protection or medical payments coverage as well. Driving without required coverage could mean a suspended license, a fine or even jail time.

Learn more: Do You Need Car Insurance?

4. Helps Pay Off Your Auto Loan or Lease After an Incident

Is your car financed or leased? If so, your lender or auto leasing company typically requires collision and comprehensive coverage. This helps pay your outstanding loan or lease if your car is stolen or totaled. Without insurance, you'd have to repay your lease or loan out of pocket—plus come up with the money to replace your car.

If your car is totaled while relatively new, you might owe more on your auto loan or lease than the totaled vehicle is worth. Guaranteed asset protection (gap) insurance can help by covering the difference between your loan or lease balance and the vehicle's value.

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5. Safeguards You Against Uninsured Drivers

Some 15.4% of drivers nationwide don't have auto liability insurance, according to 2023 data from the Insurance Research Council (IRC). In some states, the number of uninsured drivers is much higher. Uninsured motorist insurance provides protection, paying to repair or replace your car if an uninsured driver causes an accident. Without it, you'd have to sue the other driver to receive compensation. Uninsured motorist coverage may also pay medical costs, funeral expenses or lost wages for you and your passengers.

6. Helps Keep Your Vehicle in Good Condition

High-tech automotive features help keep you safe but can be costly to repair. For example, a hefty estimate for fixing a damaged backup camera could tempt you to skip repairs, but driving without the camera could increase your risk of accidents. With collision and comprehensive car insurance, you don't have to choose between safety and savings.

Collision insurance pays to repair damage to your car from collisions with a vehicle, animal or other object. Comprehensive coverage pays to repair damage from something other than a collision, like a falling tree branch or a hailstorm. File a claim and the insurance will cover the costs, minus your deductible.

7. Provides a Helping Hand When You Need It

When your car is damaged or you're injured in an accident, there's a lot to worry about—repairs, medical bills and more. Without auto insurance, you'd have to negotiate these headaches on your own. Having an insurance company on your side eases the burden: Just file a claim, and a claims adjuster takes over.

The claims adjuster will gather information about the incident, assess the damage, get estimates for repairing or replacing your vehicle and work with the other party's insurance company. If you have rental reimbursement coverage, they may arrange a rental to temporarily replace your damaged vehicle.

Learn more: How to File a Car Insurance Claim

How to Get Auto Insurance

To get auto insurance, follow these steps.

1. Have Your Personal Information Ready

For each person you want to list on your policy, you'll need:

• Name
• Birth date
• Social Security number
• Driver's license number
• Gender
• Address, phone number and email

2. Gather Your Vehicle Information

Know the following for each vehicle you want to insure:

• Make and model
• Year
• Vehicle information number (VIN)
• Current mileage
• Expected annual mileage
• Anti-theft/safety features
• Ownership information

3. Decide How Much Coverage You Need

State minimum coverage requirements are a good starting point, but you may want more insurance. Experts recommend at least $100,000 per person and $300,000 per accident in bodily injury liability insurance and $100,000 in property damage liability insurance. If your car is leased or financed, you typically need comprehensive and collision insurance too.

4. Request Insurance Quotes

Get quotes from several insurers and compare prices. You can get quotes at insurers' websites or over the phone. To save time, try an insurance marketplace, where you only need to provide your information once. You can use Experian's free auto insurance comparison tool to gather quotes from top insurance companies in one place.

5. Complete an Application

Choose your preferred quote and complete an application including details about yourself, your household and your vehicle. The insurance company will review your information and driving record to generate a final quote.

6. Pay Your Insurance Premium

You can usually save by paying your entire premium upfront. If that doesn't fit your budget, you can typically make monthly payments. Setting up autopayments can ensure you don't miss a due date.

Frequently Asked Questions

The Bottom Line

Car insurance may seem costly, but it provides priceless peace of mind. Comparing rates from a variety of insurance companies could help you save money on car insurance. You can use Experian's free auto insurance quote tool to get quotes from top insurance carriers in one place. It's a convenient way to find affordable auto insurance.