I Can’t Afford Car Insurance – What Should I Do?
Auto insurance can be too expensive for some families, to the point that drivers simply feel they need help with their payment or they can’t afford it and won’t be able to pay the bill. Unfortunately, almost every state requires drivers to own coverage, and the consequences of driving without insurance can be very costly. If you find yourself struggling to afford your insurance this month when it comes due, there are ways to lower your rates to fit your budget.
Below, we’ll discuss what happens if you can’t afford to pay your car insurance and how to get the cheapest premiums with the best coverage from good companies!
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What Happens If You Don’t Pay Your Car Insurance?
It’s not unusual for people to realize they can’t afford car insurance. This often happens after drivers buy a new car and only think about the loan payments when calculating their budget. While you may be tempted to let your insurance coverage lapse for a month, don’t do it.
First and foremost, it is important to understand the different things that could happen if you don’t pay your car insurance. It’s illegal to drive without insurance in every state except for New Hampshire, and 48 states have laws dictating the minimum amount of insurance you must carry in order to drive legally.
This means that failing to pay for your car insurance could result in tickets, fines, or worse depending on the state you live in. Some states will suspend or revoke your driver’s license, impound your car, or even put you in jail for driving without insurance. In fact, in some places, you can’t even park your car on the street or in public parking areas without having it insured. Plus, when you do buy coverage again, companies will charge you a higher rate because you let your insurance lapse.
Furthermore, if you get into an accident with no insurance, things become even more problematic. Most states use the logic that uninsured drivers are illegal and therefore should not be on the road, so no matter what sort of accident you’re in, you will be deemed at fault.
This is bad news for someone who doesn’t have insurance since you may be found responsible for the cost of damages, repairs, and medical bills. And since you don’t have any coverage from a company, you will be forced to pay for these expenses out-of-pocket.
Even if the other driver has uninsured motorist insurance coverage, and even if that company reimburses the other driver for damages and injuries, it is very likely that the insurer will sue you for reimbursement. What’s more, your state may suspend your license until you’ve paid the full amount, and that can take years. In these types of situations, many families are forced to file for bankruptcy.
The bottom line is that you should find a way to pay for your car insurance this month and figure out how to lower your rates going forward. The first thing you should do is shop around to get the best insurance rates!
Help with Car Insurance Payments
If you’re experiencing financial hardship and struggling to pay your car insurance premiums, there are a couple of things to consider in emergency situations.
Payment Extensions and Deferred Payments
If your financial situation is temporary and you expect to get paid soon, you may be able to call your insurance company and ask for a payment extension or arrangement. Not all companies can help you here, but it’s always worth it to ask. A handful of the largest companies can do what are known as “deferred” payments.
To do this, the company will take the amount of the payment you are unable to make, and then divide it by the number of months remaining in your insurance term. That extra amount will be added to each payment you make until your policy ends. Again, this is rare, but it is always worth exploring your options.
Government-Sponsored Car Insurance Programs
Three states (California, Hawaii, and New Jersey) offer government-funded or subsidized auto insurance programs for low income drivers. In California and New Jersey, you are still required to pay for your insurance, but the costs are significantly lower depending on your income and needs. In Hawaii, you can get completely free car insurance coverage if you get financial assistance as part of the Aged, Blind, and Disabled program that is unique to the state.
How To Get Affordable Car Insurance
Finally, you can consider all the different ways to lower your car insurance costs to make it more affordable both now and in the future. Here are some suggestions on how to get cheaper rates.
Make Changes To Your Policy
If you’re currently carrying full coverage, you may choose to switch to liability-only insurance with your state’s minimum coverage requirements. Usually, buying the minimum level of coverage required by the state is the easiest way to get the cheapest rates. This could lower your costs by hundreds of dollars a year and make your monthly car insurance premiums more affordable. When your financial situation improves, you can always go back and add the additional coverage you prefer.
However, if you have an auto loan, you may be required to carry full coverage insurance by your lender, so this is not an option for all drivers. In this case, consider raising your deductibles, but be sure to ask the finance company if they have any deductible requirements beforehand.
Check For Discounts
Today’s best auto insurance companies provide a number of discounts in an effort to remain competitive, and if you aren’t regularly asking about discounts you may qualify for, you may be missing out. You can get car insurance discounts for things like being a safe driver, having certain safety features installed on your car, driving less than average (low-mileage), insuring more than one vehicle on the same policy (multi-car), and even carrying your home, auto, and life insurance through the same company (multi-policy). Call your provider and ask about discounts to find out more.
Compare Insurance Quotes
If you’ve always been satisfied with your insurance provider, the idea of shopping around for a different company may be a little daunting at first. However, if it’s been a while since you’ve gotten any auto insurance quotes, you may be able to get cheaper rates or better coverage with any insurer. Compare instant quotes online from a number of top companies to see what kind of pricing is available on the market. You might just find yourself saving money without switching providers or having to make any policy changes.
Car insurance is a big responsibility, and for many people, it’s quite the financial burden. Fortunately, there are things you can do to get affordable auto insurance. Sometimes, it’s possible to call your current carrier and ask about ways to reduce your premiums. After all, they would rather work with you than lose your business altogether.
