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Car insurance is a topic that's not often discussed. It's not glamorous, it's not always an easy topic to discuss, and some people don't even think they need it. Driving without car insurance may appear like a smart financial decision to some people.
But before you hit the road without car insurance, it's essential to protect your finances and future. Consider these key reasons why it's necessary to get coverage:
1. It's the law
Car insurance is required in many countries, so there's no getting around it. If you're caught without car insurance and found guilty, the penalties are steep: fines, license revocation, and even jail time.
The sum of your fine is determined by the length of time since your policy ended. But if you've had no coverage for over three months, that could mean paying fines. To avoid this, car insurance in Australia is cheaper than you'd think and is available for everyone. Aside from the factor of the law, insurance can save you money.
2. If you hurt someone or damage their property, the cost is on you
Imagine driving home from work one day when another driver makes a right turn in front of you, causing both cars to collide. The other driver starts yelling at you while bystanders gather around and watch the scene. You take a look at your car, which has been pushed up against the curb by the impact; it's not going anywhere.
That situation could be infinitely worse if that other driver decides to sue for damages: pain and suffering; lost income because they can't go to work until their injuries heal; medical expenses for treatment; property damage (maybe there was some expensive equipment in their boot); emotional distress if they were frightened during the collision or if they suffered from post-traumatic stress afterwards.
All these would come out-of-pocket-cost which could ruin your finances.
3. Even the best drivers get in accidents
The #1 reason you should have car insurance is that accidents happen even if you're a great driver. Many people think they're invincible because they've been driving for years and have never gotten into an accident. This belief is dangerous.
If you don't have car insurance, and one of these unfortunate events happens to you or someone else, who will pay for the damages? You might find yourself liable for thousands in repairs, and cars are expensive. You may also lose your license and possibly your job, depending on the accidents' severity; this could be devastating to your family and the victim.
4. Your insurance would cover your lost wages
If you are injured in an accident and are unable to return to work for an extended period of time, your insurance may cover the lost wages. Even if you're not injured, you may be able to get some lost wages covered by your car insurance policy.
This can happen if the auto accident was caused by another driver who didn't have proper car insurance coverage (or any at all) and failed to pay for any medical bills or associated property damage costs.
5. Your insurance can be cheaper than you expect
Even if you've been driving for years, insurance companies can still use statistics to determine your risk of getting into an accident. If you've not had any accidents or moving violations in the last three or five years, your premium could be slightly lower than someone who has.
And if you're having trouble finding an affordable policy, you may want to consider buying older cars that require less coverage (and therefore cost less). Or maybe it's time to ditch that clunker and get something newer - either way, once again: it pays off.
Also, remember that the longer your policy term is, the more money it'll cost upfront. But over time, those monthly payments will add up (like a savings account) until, eventually, they're lower than what you'd otherwise pay for one year's worth of coverage.
6. You may not even need to talk to anyone when making a claim
In a car accident, you may not need to speak with anyone. You could file a claim online, by phone, or by mail. If you go in person, it's best to take photos of the damage before discussing it with anyone on site.
If you have any questions or concerns about your policy or coverage after submitting a claim, call or reach out to your insurance company and ask them what they recommend doing next.
You may not be able to afford legal help after an accident without insurance coverage.
Car insurance is an easy way to protect yourself financially and legally. Insurance can cost less than you expect and offers excellent protection against financial harm, so don't put it off any longer.