One of the most coveted privileges in American culture is driving a vehicle. It defines out teenage years and is essential for living well in country where cities are designed around cars. But with that privilege comes a responsibility of protecting both yourself and those around you. The importance of a car insurance policy cannot be overstated, and there are several compelling reasons why you should have a car insurance policy.

It Makes Financial Sense

Driving can be risky. In 2009 alone, the Insurance Institute for Highway Safety reports more than 33,000 people died, and there were millions of accidents. Each of these accidents came at a considerable cost, with repair and medical bills ranging from a few hundred dollars to hundreds of thousands. With the average American household making $44,800 every year, hitting and totaling a $20,000 car, let alone a $50,000 or more luxury car, can have devastating financial results. Auto insurance protects you from footing the bill in these situations.

Required by Law

While many people understand the benefits of insuring themselves against possible financial ruin, there are those who aren’t afraid of taking risks. It was with those people in mind that states began mandating insurance coverage in the 50s. But liability laws began much earlier than that.

As early as 1925, Massachusetts had passed the first compulsory insurance proposal into law. Already a few decades old, the automobile was already a source of many accidents. What used to once be a toy for the wealthy was now increasingly used by the masses. The need for financial responsibility became apparent as incidents of people not paying for accidents rose in number.

Following Massachusetts in 1925, New York was the second to require car insurance in 1956, followed by North Carolina the following year. Today, all 49 states require compulsory insurance coverage, with New Hampshire as the exception.

The Reasons Behind the Mandates

Most people are familiar with auto insurance as a requirement by state law, but many don’t realize the arguments behind the mandate. The primary arguments rely on financial responsibility. Accidents result in damage to vehicles and property, and sometimes people are injured. Auto shop repair bills and hospital costs often are much higher than most people can afford on their own. Most accidents would not be paid for if insurance wasn’t around, and owning a car would be out of reach for most due to the high risk of financial ruin. While personal financial responsibility laws, attempt to address this issue, these laws are often inadequate and difficult to enforce. This leaves other drivers at risk of getting hit by drivers who can’t pay for the damages.

A car insurance policy is vital for ensuring financial health. If you are without a policy, it’s important to get insured and stop taking risks. After all, it’s not just your life and well-being that you’re risking, but also that of those around you.

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