If you were hospitalized for an extended period of time, this may cause a major financial burden on you and your family members. You might not even have the money to pay for the medical and hospital bills, let alone the mortgage, car payment, and other living expenses.

Your only option may be to sue the individual who caused the accident for payments. But if he or she didn’t have enough or any car insurance and also had no assets, you might end up getting nothing. 

Please pay close attention. Even though most states require vehicle owners to carry minimum car insurance coverage, many drivers can’t afford to (or don’t) buy auto insurance at all.

The Insurance Research Council (IRC) estimated 1 in 10 households with vehicles have cars that aren’t insured. And other experts put the number even higher, stating up to 20% of vehicles on the road have no insurance. Exact figures are hard to get since few people want to admit to driving without insurance.

If you include the number of vehicles that don’t have enough insurance, these figures would increase substantially.

So to fully protect you, your loved ones, and your valuable assets, in addition to having enough insurance to cover the damages you may cause to other people and their properties, you need to buy enough insurance to pay for the damages others might cause you, your passengers, and your properties.

First, as human beings, we have the tendency to think bad things (like car accidents) only happen to somebody else.

Second, because some people believe they’re good drivers and probably never will cause any traffic accidents, they purchase or can afford to buy only the minimum amount required by their state, or worse, no insurance at all.

Third, like every other type of insurance, the real benefits of car insurance aren’t fully realized and appreciated until after a person has suffered a loss, often, a major one. So they incorrectly think insurance is a cost to be avoided.

Here’s an important fact you need to understand about auto and every other kind of insurance…

Listen to what Winston Churchill, the late British Prime Minister, once said about insurance: 

 If I had my way, I would write the word insurance over the door of every house, because I’m convinced, for sacrifices that are inconceivably small, families can be secured against catastrophes which otherwise would smash them up forever.”

Thanks to the miracle of insurance products, you have the opportunity to use a small percentage of your assets, like 2%, to protect the other 98%!

When you buy car insurance, you may pay only several hundred dollars a year to protect a vehicle that’s worth tens of thousands of dollars. More importantly, if you’re sued in an accident in which you were at fault, your insurance policy could cover you for hundreds of thousands or even millions of dollars.

Since no one can guarantee that you or one of your loved ones won’t ever be involved in a traffic accident while driving your vehicle, it’s better for you to protect yourself, your family members, and your precious possessions with the right kind of car insurance.

The two main financial reasons for purchasing car insurance are:

1. To pay for the loss or damage that may happen to you, your passengers, or your vehicle, or all three, whether it’s your fault or the other driver’s.

2. To pay for the loss or damage that you may cause to other people, their vehicle, or other properties, or all three.

Perhaps the best reason to buy the right car insurance is -- so you can sleep better at night.

That’s right, when you know you have the optimal insurance protection for your vehicle and assets, you can sleep more soundly. You know that if you or a family member should get into an accident while driving your vehicle, you won’t have to suffer financial hardships.

The key to purchasing the right kind of car insurance is to make sure you buy enough to protect you, your passengers, your vehicle, and your other valuable assets, instead of just getting the minimums required by your state.

If you buy only the minimums required by your state, you may be taking an enormous risk. If you should get into an accident in which you were at fault, you may not have enough insurance to cover the damages you caused to others. So if you are sued, you could end up losing your home, life savings, investments, and everything you now own.

On the other hand, when you carry the optimal car insurance, even if the accident was 100% the other driver’s fault, if he or she doesn’t have enough (or any) insurance to cover the damages done to you, your vehicle, or both, you may not get the compensation you deserve and need.

Like many people, you probably find buying car insurance to be a frustrating process. This happens most likely because you aren’t familiar with the rules of the auto insurance game.

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