For many drivers, car insurance might seem like more of a nuisance than a benefit. The cost of insurance premiums often averaging a few hundred dollars a month is enough to make anyone cringe. However, what must be understood is that having adequate car insurance is for your own protection. It provides many benefits to covered drivers and could save you money in the long run. Here is a closer look at the importance of car insurance.
It’s the Law
The first thing to point out about car insurance is that it is a legal requirement in the U.S. If a driver is pulled over and does not have a license, they are subject to any of the following:
- Suspension of their license
- Vehicle registration suspension
- Traffic tickets and fines
- Mandated to obtain an insurance policy– this means that you have repeat violations for driving without insurance and require a SR22 insurance document for proof that you’re carrying an insurance policy.
It’ll Cost You More Without It
Aside from the legalities of carrying adequate car insurance, drivers must look at the financial aspects of not having it. If you’re not properly covered and get into an accident it could cost you a significant amount of money. Accidents can range from the hundreds to thousands of dollars depending on the extent of the damage. A person without insurance would be required to pay for the following:
- Damage or replacement of the vehicles
- Damage to any property
- Medical bills for injured parties
- Medical expenses relating to the accident
- Potential court costs should the injured party decide to file suit
- Mandated fees as a result of court findings including but not limited to pain and suffering, lost wages, and long term medical costs.
When you consider the consequences of not having the insurance policy in hand, it simply makes more sense to invest in coverage to protect yourself legally and financially. Below are a few tips on the types of insurance coverage available and tips for finding affordable rates:
Types of Auto Insurance Coverage
There are typically three types of insurance – liability, collision, and comprehensive coverage. Below is a brief explanation of each:
One the most basic forms of insurance is the liability coverage. This insurance policy will cover you in the event that you’re involved in an accident that’s your fault. This insurance will cover the cost of repairs for any damage as well as medical expenses. These policies however, do not cover the cost of damage to your own vehicle.
Collision coverage adds another layer of protection to the liability insurance. This will pay for the expense of repairs to your property in the event of an accident in which you are the at fault party. This insurance is usually required for new cars as the lien holders want to protect their asset.
While liability and collision insurance cover vehicle accidents, comprehensive coverage takes care of damage to your property outside of an auto accident. This could include damage due to weather, vandalism, theft, or hitting a deer. It will cover the cost of damages in scenarios as described above.
Finding Affordable Insurance
Are you in the market for affordable car insurance? If so, here are some things you can try to get lower rates:
- Check your credit score – if your credit score is higher than it was when you purchased your insurance policy, try reapplying. Your credit rating can greatly determine how much you pay each month.
- Maintain a decent driving record – good drivers make for great insurance customers. There are some insurance providers that will reward customers for being safe on the road.
- Compare prices – price comparisons can help you find the best insurance rates with the right amount of coverage. Look at the rate of at least three companies for the best choices.
- Increase your deductible – if you can afford it, increasing your deductible (out of pocket expense in the event of an accident) can lower your insurance premium.
- Bundle Services – if you’re in need of home, renter’s, boat, or second car insurance getting them from the same insurance provider can save you a decent amount on your monthly premium.
Hopefully this has given you some insight on the importance of driving insured. You should also remember to invest in adequate insurance coverage as each policy type adds a different layer of protection that can save you money should the unforeseen happen. Just look at it this way, insurance coverage is more than a monthly bill, its an investment that provides peace of mind.