What is the most important reason for having auto and home insurance?

The most important reason for having auto and home insurance is financial protection against losses that could otherwise be devastating.

In plain terms: insurance protects your assets, income, and future from events you can’t reasonably afford to handle on your own.

Why this matters most

1. Protection from large, unexpected losses

• A serious auto accident or a house fire can result in six- or seven-figure costs when you add up property damage, medical bills, legal expenses, and liability claims.

• Very few people can absorb those losses without long-term financial harm.

2. Liability protection

• If you injure someone in an auto accident or someone is hurt on your property, insurance helps cover:

  • Medical costs

  • Legal defense

  • Settlements or judgments

• This protects your savings, home equity, wages, and even future earnings.

3. Preservation of what you’ve built

• Home insurance protects one of your largest investments.

• Auto insurance keeps a single accident from undoing years of financial progress.

4. Peace of mind

• Knowing you’re protected allows you to make decisions without the constant fear of “what if something goes wrong.”

A key perspective (especially relevant today)

Insurance is not meant for small, manageable losses—it’s meant for the big ones that could change your life financially. Using it this way helps keep coverage meaningful and sustainable over time.

Bottom line:
Auto and home insurance exist to protect you from financial ruin, not inconvenience. Everything else—lender requirements, legal compliance, convenience—comes second.