Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Many states require auto insurance in order to register a car. A car is a lethal piece of equipment. It can hurt people and destroy property. It can be damaged and suffer loss itself. People need auto insurance because they normally cannot afford to cover the huge losses that they can create with a car. An insurance policy spreads the risk of operating a car over a large group of people. The insurance company tries to make the costs as equitable as possible. The result is that when someone is injured in an accident there should be some money available to pay the medical bills, repair the broken vehicles and provide interim transportation.
First, if I own a car and while it is being used it hurts someone or damages their property, I feel one has a moral obligation to reimburse them for their injuries or damage. Moral obligations would seem to be one of the cornerstones of any society.
Since most people don’t have a pile of cash hanging around to reimburse people who they hurt, auto insurance is a convenient efficient mechanism that helps people do that. For a relatively small amount of money, an insurance company will agree to reimburse someone should my car injure them. Depending on my moral compass, that limit could be anywhere from a few thousand to several hundred thousand dollars.
Of course, I also might realize when driving my car someone could hurt me or passengers in my car. So, I might like to have the same kind of agreement with the insurance company, pay me if someone hurts me and doesn’t have any insurance or not enough to make me whole again.
Then of course, if I run into someone or something with my car and damage it, it would be nice not to have to come up with a large sum of money to fix or replace it. So it makes sense to include that in the deal I make with the insurance company.
Most states have enacted laws, which say if you want to drive your car on our highways, you have to agree to be responsible for any damage you cause. To back up that promise, you have to prove you are financially able to do that. You can either put up a substantial sum of money in the form of a bond or an insurance company will do that for you for a price.
In a nutshell, these are the basic reasons to consider buying insurance. And if you want to consider the alternatives, walking, driving a car only around your own yard or coming up with a large sum of cash, I think you will find insurance a very attractive alternative.
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I can suggest of a number of reasons.
First, if I own a car and while it is being used it hurts someone or damages their property, I feel one has a moral obligation to reimburse them for their injuries or damage. Moral obligations would seem to be one of the cornerstones of any society.
Since most people don’t have a pile of cash hanging around to reimburse people who they hurt, auto insurance is a convenient efficient mechanism that helps people do that. For a relatively small amount of money, an insurance company will agree to reimburse someone should my car injure them. Depending on my moral compass, that limit could be anywhere from a few thousand to several hundred thousand dollars.
Of course, I also might realize when driving my car someone could hurt me or passengers in my car. So, I might like to have the same kind of agreement with the insurance company, pay me if someone hurts me and doesn’t have any insurance or not enough to make me whole again.
Then of course, if I run into someone or something with my car and damage it, it would be nice not to have to come up with a large sum of money to fix or replace it. So it makes sense to include that in the deal I make with the insurance company.
Most states have enacted laws, which say if you want to drive your car on our highways, you have to agree to be responsible for any damage you cause. To back up that promise, you have to prove you are financially able to do that. You can either put up a substantial sum of money in the form of a bond or an insurance company will do that for you for a price.
In a nutshell, these are the basic reasons to consider buying insurance. And if you want to consider the alternatives, walking, driving a car only around your own yard or coming up with a large sum of cash, I think you will find insurance a very attractive alternative.