Car insurance in short is important to have in order to protect you and your possessions plus it is mandatory in most states. All states require financial responsibility when driving a vehicle and most fulfill this requirement by maintaining at least the state's minimum insurance which is typically liability. States differ on what their mandatory requirements are for a list of state requirements as of June 2004 you can read our article How Much Car Insurance Should You Buy.

Beyond the mandatory reason to carry auto insurance, it is important to have so you can protect you, your family and your property against unexpected events such as accidents, other collisions or lawsuits resulting for those types of incidents. Insurance helps protect your investment in your vehicle, medical expenses resulting from an accident and pay for damages due to theft, vandalism or colliding with an animal if you purchase the comprehensive and collision coverages for your vehicle.

By having car insurance you are paying a premium to an insurance company in exchange for them paying for specific vehicle related financial losses that occur during the term of your policy. Without insurance on a vehicle you risk paying the full cost of repairs to your vehicle, another party's vehicle and for bodily injuries caused and if you do not pay then there is possibility of being taken to court to have a judgement placed against you.

Hope this information helps you with your school report. If you need more information our Learning Center has insurance terms and articles that might also be of help.