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All About Car Insurance - Part 2

What Happens If I'm uninsured?
Simple answer: Nothing good. You can receive fines, lose your license or have it suspended, have your vehicle registration suspended, get forced to pay all expenses for someone else out of pocket. You could even get jail time (mostly if you cause an awful accident, or you're a repeat offender).

What if I can't afford It?
Unlike other things, such as education, access to a car is not a right. You won't get a waiver to drive uninsured. You'll either have to find a way to pay the cost, use available public transportation, or bum a ride from a friend.

What if I don't get in many accidents? Is it worth It?
Absolutely! At some point, you'll have an accident of some kind, even if you're not at fault. Thankfully, good coverage will help you avoid paying out-of-pocket expenses for unexpected events. Deer collisions, for example, are exceedingly common in the United States. In many parts of the US, you have a high enough chance of hitting a deer such that having low deductibles and comprehensive or collision coverage only make sense.[1]

How do I get the best deal?
The more you know, the easier this gets, but you will always have to search for a good deal, and you'll have to play it safe to avoid getting burned by a company. Here are the steps you'll want to take.

Determine minimum coverage for your state
You can use several websites to do this. AAA provides an elaborate list of coverage minimums.[2] Minimum coverages can vary widely by state and are determined by state legislatures.

Compare rates from different companies
Now that you know what average rates are, you can compare rates from different companies. Ratekick is one good website to use for this, as are NerdWallet, CarInsurance.com, and The Zebra.

You may see the rates referred to as quotes, which means that the price you see is only an estimate of what you will pay, based on average rates for other drivers like you.

Pick companies that look promising and research them
While the rate searching websites may provide you with star ratings of each company, that may not be good enough. Most of those star ratings are average ratings from customers. Instead, turn to the best source for this: the Better Business Bureau. On the BBB's website, you can do a simple research and find out whether a company is rated well, and locate any legal complaints filed against the company. Every company will have some complaints from customers who wanted the impossible, but a consistent pattern of problems is a negative indication.

Pick a plan that requires yearly or bi-annual payments. Avoid monthly payments
You may be tempted to pay your premiums on a month-by-month basis to make each payment smaller. Think twice before taking this option. Your company will likely charge you a higher rate, resulting in a larger overall amount. Instead, choose to pay twice a year or in one lump payment. Yes, this will require you to budget for that larger payment, but you'll save money in the long run.

Choose the right coverage
If you find yourself on busy highways and city streets often, don't get the minimum coverage. Instead, choose something with a low deductible and a good amount of collision. You're going to need it sooner than you may think, even if it's just for a simple fender bender.

Also importantly, if you use your car for work, regular insurance won't cover an accident. Instead, you'll need to get an endorsement for commercial auto insurance, or you may need to purchase a commercial plan outright instead of a regular one.

See if you can cut a deal
Sometimes, you may be able to work out a deal with your company for a lower rate. Check to see if the company you work for has a deal with them, or if the type of job you work would qualify you for lower rates. Many companies will have rate discounts for teachers, emergency workers such as police and firefighters and even college or high school students.

Combine your policies if you can
Do you have other policies, such as a homeowners' insurance policy? You may be able to purchase your plan directly from the same company and get a significant discount if you do.

Read the policy details before you make the deal
As difficult as it is sometimes, read the fine print before you confirm and sign. Pay attention to what won't be covered after an accident, and the factors that determine who is at fault. Your company won't cover damages if you are at fault, and if the person who hit you doesn't have insurance, you'll be paying out of pocket for all of your expenses. That is, of course, unless you purchased a collision package that covers you even when you're at fault.

Car insurance is complicated. It's also mandatory, and expensive. If you want to drive, you need to have it, so your best option is to understand it thoroughly, shop wisely, and get the best deal you can!

Notes
2. "Digest of Motor Laws" . DrivingLaws.AAA.com