What Do I Get From Having Insurance? 

Insurance policies offer protection against economic loss, that is, loss or damage that can be measured in purely financial terms and compensated by money. For example, an insurance policy can pay for the cost to repair or replace a damaged automobile, for the cost of medical treatment for an injury or illness or for the lost income of a person who dies or is unable to work. The purpose is to place the injured party, as nearly as possible, in the same financial position as if the loss had not occurred. 

If you don't have insurance, there are a lot of expenses you'll be paying yourself that an insurance company would usually pay for. First of all, you will have to arrange for defense of the lawsuit. This usually involves hiring an attorney experienced in the defense of automobile liability cases to represent you. You will have to pay the attorney's fees and other court related costs, even if you ultimately are found not to be legally responsible for any damages. 

If you are found to be liable for causing damages to the party who sues you, a "judgment" will be entered against you for a specific sum of money. The amount of the judgment will be based on the extent of the damage proved in the lawsuit. It could be a very large sum of money, potentially hundreds of thousands of dollars or even more, depending on the extent of the damage and the severity of the injuries that you caused. If you fail to pay or are unable to pay the full amount of the judgment, the party who obtained the judgment becomes one of your creditors and could institute legal proceedings to collect the money from you. 

Your insurance policy can also provide very valuable benefits to you. In some states, while insurance is "Mandatory", some people still drive without it and cause accidents. You can arrange to buy coverage in your policy that will act as though it was the uninsured person's insurance. You can then be compensated for any injuries or losses without having to collect from the uninsured person. Other provisions available in some states can pay your medical bills for accident related treatment (try getting your doctor to wait until the case is settled to be paid!) or increase the amount available to cover your injuries if they exceed the other driver's policy limits. What if the other driver caused an accident and you missed six months of work - and then you found out the driver's policy limit was only $10,000.00? You can use insurance to protect yourself from this result!

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