Can you help me understand what car insurance actually does?

I don't think I understand what the purpose of car insurance is, so it's hard to grasp why it's legally mandatory.

Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Car insurance
can be complex, but at its core, it’s to protect you and other drivers while on the road.
types of car insurance
exist to cover damage you do to someone else or their property, or damage that someone else does to you or your property.
By paying a premium (your monthly car insurance rate) to your insurance company, your company agrees to cover any costs associated with your driving. Paying for car insurance is significantly less expensive than paying for any damage or injuries out of pocket.
Let’s say the worst case happens: you aren’t paying attention and you rear-end someone. You are financially responsible for that damage.
Accidents can cause thousands of dollars of damage. Without car insurance, you’d likely have to pay that out of pocket! If you can’t pay, people might have to take legal action to receive assistance with medical or repair bills.
Because of the high financial risks of driving to individuals, most states have
minimum car insurance
requirements. This usually includes
liability car insurance
. If a state didn’t require insurance, no one would be able to afford to drive. The risk of an accident or other event would be too high.
Simply put, car insurance makes driving much safer and affordable.
Now that you have a better understanding of what car insurance is and why you need it, you should make sure you get the proper coverage. If you don’t currently have insurance, look into several companies so you can find the best rates. You can request quotes online or use
. Jerry can provide you with competitive quotes in under a minute. Swapping is just as effortless. Jerry takes care of all the paperwork and phone calls—oh, and it’s free!
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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