Why Do People Need Car Insurance? 
-- > Normal 0 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 dont 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 doesnt 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 . 