What Do Car Insurance Dollars Pay For?
February 12th, 2010 by Adriana Noton, under Travel and Leisure. No Comments
No matter how you pay for car insurance, you probably pay a pretty hefty sum of money for car insurance. While it is possible to lower the amount that you pay by shopping around for insurance, you may still wonder what all those dollar give you. In short, you get peace of mind for the dollars you will pay. The long answer may help you to better understand the final destination of your premiums.
Purchasing car insurance fulfills your state’s financial responsibility laws. These laws are different in each state. Some states only require drivers to have very little liability insurance, while others require more liability insurance and other coverage as well. In some states, the insurance company is required by law to report if you allow the coverage to lapse by even one day and the state can cancel your vehicle’s registration or your driver’s license until you submit proof of insurance and pay a fine or the administrative cost to reinstate.
Driving without car insurance, however, can cost you much more than just a fine. If you are in an accident, you can be held financially responsible for the other person’s vehicle and medical expenses. In addition, you will likely be ticketed for driving without insurance. These expenses can far outweigh anything you might pay in insurance fees.
In addition, you may find yourself responsible for the repair or replacement of your own vehicle. Many people depend on that vehicle for work. If you cannot get to work, you cannot pay for a replacement vehicle. If your vehicle is in the repair shop for a significant amount of time, then you may need to pay for a rental vehicle until it can be repaired.
In addition, the comprehensive coverage on your vehicle covers it in the event of vehicle theft, vandalism or if windows are broken and need to be replaced. In many areas car theft is far more common than we would like to think. If your car is stolen, it is not usually recovered without some damage. Many stolen vehicles are eventually wrecked and then abandoned. Others are stripped and sold for parts.
If you drive a newer vehicle that is on a loan or lease plan, it is very likely that the finance company will require that you have full coverage insurance. If you do not have this insurance, the loan company will purchase the coverage for you and you will have the very expensive cost of this insurance added to your vehicle loan. Some car loans actually allow the finance company to repossess a vehicle whose owner allows the coverage to lapse.
The best way to find the cheapest car insurance is to comparison shop by asking for quotes for insurance on line. Many companies offer free quotes just for asking. Get several of the quotes and find the best price for your situation. While you can get quotes without giving personal information, you will get the most accurate quotes by giving all the requested information. Compare each quote to find the best price.
When you think about it, the price you pay for peace of mind is not all that much.
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