What is the main purpose of having auto insurance?
Asked by: Prof. Kyra Parisian | Last update: July 26, 2025Score: 4.1/5 (18 votes)
What is the main purpose of auto insurance?
Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.
What is the main purpose of having auto insurance everfi answers?
Explanation: The main purpose of having auto insurance is to protect yourself against unintentional costs and financial losses. Auto insurance is mandatory in most countries to ensure that drivers have at least some liability coverage in case they are responsible for an accident.
What is the main purposes of insurance?
Purpose of insurance
Its aim is to reduce financial uncertainty and make accidental loss manageable. It does this substituting payment of a small, known fee—an insurance premium—to a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss.
What is the main purpose of having auto insurance Quizlet?
Auto insurance protects you in case of an accident or theft of your vehicle.
Car Insurance Explained - 101 | Everything you NEED to know!
Why do people have to have car insurance?
Having car insurance is required by law in most states. If you are at fault in a car accident, the auto liability coverage required on your car insurance policy helps pay for covered losses, such as the other party's medical bills and damage to their vehicle or other property that results from the accident.
What is the main purpose of automobile insurance is to prevent collisions?
Expert-Verified Answer. The main purpose of automobile insurance is to protect against major financial loss. It provides coverage for repair costs, medical expenses, and liability, helping individuals avoid large out-of-pocket expenses after an accident.
What is the primary purpose of insurance?
Insurance helps to protect you and your family against unexpected financial costs and resulting debts or the risk of losing your assets.
What is the basic purpose of insurance?
The primary purpose of insurance is to provide protection against financial losses due to unexpected events. By paying premiums, policyholders transfer their risk to the insurance company, which then compensates them when losses occur.
What are the two main functions of insurance?
Functions of Insurance
They provide certainty to the insured. They ensure the protection of the family. They are risk-sharing policies. They prevent the damages that can come from loss.
How to get everfi answers?
The answers to Everfi exercises can be found in resources provided by Everfi, including answer keys, instructor guides, and student resources.
What is the primary purpose of insurance quizlet?
From our discussion in class and the "insurance function" slide with narration, we know that the primary purpose of insurance is to protect against risk.
What is a premium everfi answer?
The premium is the amount you pay the insurance company for coverage. Premium payments may be due all at once or divided and paid on a regular basis, usually monthly.
What is the main purpose of having auto insurance everfi answer?
Why is it important to have insurance? It's important to have insurance so people can protect themselves from losing a lot of money in the event of an unpredictable event or something happens to them or their property.
What is the main purpose of having auto insurance brainly?
Explanation. Auto insurance is primarily meant to provide financial protection for drivers in the event of accidents and other related incidents involving their vehicles.
Who is the #1 insurance company in the USA?
State Farm is the largest auto insurance company in the U.S. based on written premium, or the total amount it bills customers. Progressive is the second-largest car insurance company, followed by Geico and Allstate.
What is the primary purpose of car insurance?
Car insurance covers damage to your vehicle and protects you financially if you're liable for someone else's injuries or damages. Auto insurance can also pay for medical bills if you or your passengers are injured in an accident or if you're hit by a driver who is uninsured or underinsured.
What is the purpose of insurance?
There are at least two reasons why insurance is purchased. The first, and perhaps most important, is for protection against loss from some catastrophic event. A car accident, an illness or injury, or death can lead to serious financial consequences. Insurance helps to provide protection against these financial losses.
What was the original purpose of insurance?
Insurance is the oldest method of transferring risk, which was developed to mitigate trade/business risk. Marine insurance is very important for international trade and makes large commercial trade possible.
What is the prime purpose of insurance?
Provide protection : The primary purpose of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happending of the risk, but can certainly provide for the losses of risk.
What is the primary benefit of having insurance?
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident.
What is one cost of avoiding insurance?
One cost of avoiding insurance is falling into debt if faced with a serious problem. Without insurance, individuals may have to bear the full financial burden of medical treatments, property damage, or legal liabilities, leading to significant debt.
Why do I need auto insurance?
Lawmakers in most states have made it illegal to drive without insurance to protect constituents from the high costs of covering medical expenses or property damage. These laws also serve as a deterrent.
Is it better to have collision or comprehensive?
If your car is damaged in a road collision with another car or object and you're at fault, only your collision coverage can help pay to repair it. Only comprehensive coverage covers losses caused by contact with animals, civil disturbances, fires, natural disasters, theft, and vandalism.
What happens if someone wrecks your car and they aren't on your insurance Progressive?
Allowing another licensed driver to borrow your vehicle is known as "permissive use," which means you give someone, who isn't listed on your car insurance policy, permission to operate your vehicle. If they're involved in an accident, your auto insurance may pay for the damages and injuries, up to your coverage limits.