If you can’t afford your auto insurance you will need to find a car that is cheaper to insure, obtains auto insurance discounts, decrease your deductible or change the optional insurance covers you are paying. There are no alternatives for people who cannot afford auto insurance other than to stop driving.
This may seem cold or callous, but the bottom line is that it’s the state law, in all states except New Hampshire, to carry auto insurance and there are no exceptions to this rule.
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When you look online for the solution to your problem of being able to afford your insurance, you will find a lot information about why you can’t afford to be without auto insurance. There really isn’t any good information about what to do if you simply don’t make enough money to make those monthly payments.
The reason for this is simple, there is no solution; at least not in the sense of government help or reduced cost plans for people in lower income brackets. That, however, doesn’t mean that you can’t do some things for yourself, the question is, are you willing to go the extra mile to be able to afford some sort of insurance.
Why isn’t there federal coverage for auto insurance for people in a low-income bracket?
The bottom line is that the government doesn’t consider car ownership a requirement, which means that they don’t consider paying for auto insurance as part of a federal or local government responsibly.
What it boils down to is that driving a car is not a life or death choice, unlike health care, which means that they aren’t going to provide a helping hand in terms of paying those bills. In the eyes of the government, if you can’t afford the fiscal responsibilities that come with owning a car, then you need to consider other transportation options.
If I can’t get a government sponsored or reduced price coverage, what are my other options?
The first thing that you need to consider is the car that you are driving. It may seem untenable to you, but if you are driving a new car that requires full coverage, because of your lender, then you may need to give up that car in lieu of something that you own outright.
When is it OK to drop coverage options?
When you buy a car that you have to finance, your lender will require you to purchase comprehensive and collision coverage for your vehicle in order to protect that investment. However, your minimum requirement from your state is liability only.
While your lending company is within their legal rights to require you to carry more expensive insurance, if you own your car and don’t owe any money to a bank, then you can forgo this additional coverage.
If buying a car outright is out of the question, then buying a used older car may be the solution. Even if you get a loan, your obligation for insurance will be lower because the value of the vehicle is lower.
For example, a 2002 Dodge Caravan with 100K miles on it and middle of the line comprehensive, collision and liability coverage is only $52 a month for a middle aged driver with a clean driving record, in some states. Liability only for this vehicle drops to $29 a month, a very affordable rate.
What else can I do to reduce my costs?
Something that many people rarely consider when struggling to pay their insurance bill is reducing some of their other costs in an effort to pay it. For example, you can forgo cable in your home. Cable is not required by law and it won’t be the end of the world without it.
If you really need that entertainment, consider sources like Netflix that offer thousands of movies and TV shows for less than $10 a month through streaming to your TV or computer. In addition, you can keep up with your favorite shows on sites like Hulu or on network and non network sites.
This isn’t an endorsement for these services; you just need to understand that cable is a luxury and it is better to carry auto insurance than it is to pay what can be a very large monthly cable bill.
If you have to have comprehensive and collision coverage, don’t forget to choose a higher deductible. This will go a long way towards keeping your rates down as well.
I’ve trimmed my budget all I can, what can I do about auto insurance?
You should never underestimate the power of shopping around for your auto insurance needs. You have probably seen dozens of different commercials about how one auto insurance company or another has saved their customers hundreds of dollars a year; the truth is that these are valid claims.
The problem is a company that has low rates for one person may not have low rates for another. By shopping around, you can find the company that can offer you the lowest rates.
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