why do we need car insurance?

Flor Lizardi: Why do we need car insurance?Easy Answer: because the law says so.More Complicated Answer: because it's good public policy. With out insurance or some type of financial responsibility law being met - folks would be able to drive around and inflict injuries and damage and the "innocent" person would not be financial compensated for their injury/damage. The innocent person would be stuck paying for medical bills and property damage with little to no hope of being paid back by the at fault party. Therefore, the government has mandated financial responsibility laws that require motorist to meet a minimum standard of financial responsibility. The easiest way to meet this requirement is to purchase insurance. However, many states will let you pay to file a bond once you show that you personally have the financial resources to pay for damages/injuries up to the minimum limits.How Does it Help Us?See prior answer. How much do we need to pay? Easy Answer: what ever t! he insurance bill says you payMore Complicated Answer: insurance premiums are based on risk. The higher the risk - the higher the premium. Therefore, younger drivers, drivers with moving violations/accidents/dui's pay more than drivers who have not incurred moving violations/accidents/dui's. Studies also show that those with bad credit are more prone to accidents - therefore, many companies use credit scores when rating policies. Studies also show that certain vehicles are more likely to inflict injuries and damages when involved in crashes. Therefore, certain vehicles are a greater risk - therefore your premium can be affected by what type of vehicle you drive. Insurance companies classify drivers by the risk they pose. The rates are set for drivers in that class. Therefore, drivers in the higher risk classes pay more than those in the lower risk classes. Certain factors are not allowed to be use to consider rating (such as race, religion)....Show more

Nicolasa Hen! ke: 1) car insurance pays for the damage to: your car, another! person's car, someones property or for injuries in the event of a crash or other named loss.2) it helps you in the event you accidentally slide into a bus full of school kids and send everyone of them to the ER -- then you are sued by twenty parents. Insurance will usually prevent you from having to liquidate ALL of your assets and give up 1/3 of your income for the next ten years paying the bills.3) you need to pay enough money to be covered for a minimum of $400,000 in liability protection. One million would be even better....Show more