No matter where you live, if you want to own and drive a car you will need to buy auto insurance. The type and amount of insurance you may be required to carry varies from state to state. In general you are required to carry property damage and bodily injury liability insurance for injuries sustained by another party or his or her property.
Financing a Car
When you are making payments on a car you will be required to carry comprehensive and collision coverage in addition to state mandated liability coverage. A lender will require you to carry full insurance to cover the value of the car or the amount that you are actually financing. By having adequate insurance, the lender will be assured that if you have an accident or your car is stolen, the company’s interest in the car is protected.
If You Own Your Car
While it is usually not required that you carry comprehensive or collision coverage if your car has been paid off, it may still be wise to purchase that type of auto insurance. Even if your car is 5 or 6 years old, it still may be worth quite a bit. If you intend to keep your car for a while and it is in good condition, you will want to have coverage in case you get in an accident or it is stolen. It is worth paying a few hundred dollars in an additional premium to pay for repairs in the event of an accident.
Keeping the Premium Down
If you decide to get comprehensive and collision auto insurance, you can reduce the amount you will have to pay by increasing your deductible. Also, look for discounts from your insurance company for such things as being a safe driver or having certain safety equipment on your car.