People have understood the importance of car insurance since the very first years after cars were invented. Insurance, in fact, has been in place since immemorial times – ancient Chinese and Babylonian tradesmen who contracted loans to finance their ships or their load could pay an extra incentive for a guarantee that, in the event that their ships were lost at sea, they would no longer pay the rest of the loan.
Car insurance these days protects traffic participants from unforeseen events. Depending of the type of policy that you bought, you can be reimbursed if your car gets stolen or damaged in any way, have the insurance company pay for other people’s hospital bills and fix their cars if you cause an accident or receive roadside assistance and towing if your car breaks down in the middle of the road. In the event of an accident, the insurance system is made to cover you, your passengers, your vehicle, as well as other traffic participants, pedestrians and non-moving objects that may have been damaged.
Most American states require drivers to hold some minimum form of insurance. Should they cause an accident, their insurance company must take care of any injured peoples’ medical expenses as well as repair shop bills.