What To do If You Can’t Afford Car Insurance

If you can’t afford car insurance you must be looking for ways to reduce the cost of your auto insurance.

Almost every state requires a driver to have minimum car insurance Except states like New Hampshire, Arizona, and Virginia which allow drivers to provide proof of financial responsibility or uninsured motorist registration.

The annual average cost of car insurance  for drivers in the U.S. is $2,148 for full coverage and $685 for minimum coverage according to NerdWallet’s 2023 rate analysis.

Here in this article, we will discuss what to do if you can’t afford car insurance and the steps you can take to lower your premiums.

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What to do if you can’t afford car insurance

Compare insurance costs

Before buying a car, ensure you compare the cost of insurance as certain types of cars cost more to insure.

You may qualify for discounts from your car insurance company if your car has security features that help reduce the risk of theft or injuries.

Shop Around

Shop around for bargains on the cost of your car insurance. Compare car insurance rates from various insurance companies to see how much you can save.

To compare car insurance costs and coverage, ensure you get quotes from at least three insurance companies.

Take advantage of discounts

Auto insurance companies often offer discounts which can help save a good amount of money. Several discounts are offered by an insurer. But common discounts to take advantage of includes:

Good student discount – For full-time high school or college students between 16 – 25 years with at least a B average.

Good driver discount – Insurance companies offer discounts for drivers who haven’t had an accident or traffic violation for several years.

New car discount – For new vehicles that are less than three years.

Vehicle safety discount – Vehicles that are equipped with built-in security and safety features like an anti-theft device, anti-lock brakes, and airbags may qualify for a discount.

Multi-Car discount – It will cost more to insure one vehicle than to insure several vehicles with the same insurance company.

Take a Defensive Driving Course

If you complete a defensive driving course approved by your car insurance company can earn you a discount. Check carefully to ensure that the course translates into enough insurance savings.

Allow your insurance company track your driving

Your insurer will take a look at how often you use your car. The more time you spend behind the wheel means the more exposure you are to risk.

Some insurance companies offer discounts to drivers with low mileage. This can be done by allowing your insurer to monitor your mileage. You must exhibit good driving habits to qualify for the low mileage discount.

Set a higher deductible

A deductible is an amount you agree to pay before your insurance kicks in to help pay for a covered loss. Your insurer can help you to select which limits, deductibles and coverages are best for you.

Choosing a higher deductible means you will pay less for your car insurance coverage. But ensure you have to need enough money in your pocket if you need to file an insurance claim for car repairs.

Choose the minimum coverage

If you can’t afford very expensive car insurance, you can choose the cheapest car insurance minimum coverage required by your state.

According to a recent NerdWallet analysis, a good driver with minimum coverage pay an average of $561 per year compared to $1,630 for full coverage,

Many states have an auto insurance requirement involving liability coverage. This will cover expenses related to injury, death, or property damage of others when you’re at fault.

Park your car in your home garage

Your insurer will consider where you live and where you park your car overnight. You will pay less premium if you park your car in your home garage which is safe than on the street or driveway.

Bundle Insurance Policy

You will get a multi-policy discount on your auto insurance if you decide to pair it with other insurance policies such as the homeowner, renters, condo, motorcycle, life, or any other insurance policy.

Maintain a good credit-based insurance score

Most insurance companies, use credit-based insurance scores to determine insurance rates except in states such as California, Hawaii, and Massachusetts.

To qualify for lower rates you must have a good credit-based insurance score, an excellent driving record zero claims on your record.

According to the Insurance Information Institute (III), credit-based insurance scores only consider factors like your payment history and the length of your credit history to assess your insurance risk level.

According to statistical analysis, those with better credit scores are likely to get into fewer accidents and cost insurance companies less. While those with worse insurance scores are more likely to file a claim and cost insurance companies more.

Factors That Affect Your Car Insurance Premiu

Your age

Your age and gender may impact your car insurance premium. Older drivers often pay less for car insurance than younger, less experienced drivers.

Your car type

The type of car you drive is another factor your insurer will consider to determine the cost of your insurance. Cars without security devices like anti-theft devices may cost more to insure.

Your driving record

A new driver who has not had insurance before may pay more for car insurance. A driver with multiple accident records may pay a higher premium compared to a driver with a clean record.

How much you drive

The more time you spend driving means more risk exposure. An insurance company will look at how much you use your car. Someone who drives daily will pay more for insurance than someone who drives on weekends.

Demographic factors

Another factor your car insurance company will consider is where you live and where you park your car overnight. Those living in urban areas with high rates of accidents, theft, and vandalism will pay higher premiums for insurance than those in rural areas.

The type of coverage

The cost of your car insurance premium may be affected by the coverage you select. Your car insurance policy can include comprehensive coverage, collision coverage, uninsured/underinsured motorist coverage, and medical payments or personal injury protection.

Your limits

The more coverage you purchase, the higher the cost of your car insurance premium. Each coverage in a policy has its limit. Which is the maximum amount your policy will pay toward a covered loss.

Your deductibles

Your deductible is another factor that determines the amount of your premium. This is the amount you agree to pay before your insurance kicks in to help pay for a covered loss. When you set a higher deductible this means you’ll pay less for your policy.

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