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What to Do if You Can’t Afford Car Insurance

While car insurance policies can help cover many vehicle-related expenses, they aren’t cheap. Here’s what to do if you can’t afford car insurance.
What to do if you can’t afford car insurance
What to Do if You Can’t Afford Car Insurance
If you’re feeling the pinch from steep insurance prices, think outside the box. Let’s consider what to do if you can’t afford car insurance.
In this article

Navigating the intricacies of car insurance amid financial constraints can be daunting. While various uncontrollable factors influence premiums, compromising coverage isn’t the only solution. Let’s explore what to do if you can’t afford car insurance. It is important to know about actionable strategies and essential insights to manage costs and ensure continuous coverage without exacerbating financial burdens. 

This guide dives deep into understanding the complexities of car insurance, shedding light on penalties and offering practical tips for affordable options.

What to Do if You Can’t Afford Car Insurance

If you cannot afford car insurance due to steep rates, there are avenues to explore for more budget-friendly alternatives. A lot of sources highlight essential tactics below to reduce auto coverage expenses. While comparing quotes and adjusting coverage limits are immediate solutions, improving your credit score and clearing driving violations might require several months to a year.

If affording car insurance becomes challenging due to high rates, consider the following options:

  • Compare minimum car insurance policies in your state.
  • Seek out all available discounts.
  • Obtain a pay-per-mile car insurance quote.
  • Aim to improve your credit score and maintain a clean driving record.

Auto Insurance Cancellation

Facing auto insurance cancellation for non-payment? Be wary of limited grace periods offered by insurers, potentially leading to reinstatement fees. A lapsed policy can spike future rates. Leasing? Missed payments could trigger lender-imposed, costly, force-placed insurance, prioritizing their interests over yours with minimal coverage at premium rates.

Driving Without Insurance Legal Penalties

Driving uninsured risks license suspension, fines, or jail. Penalties escalate with multiple offenses. Considering an average $80/month insurance cost in 2019, the gamble could be more worthwhile.

Here are some other consequences of driving without insurance:

  • Potential jail time ranges from weeks to a year.
  • License plate and registration suspension.
  • Accumulation of points on your driver’s license.
  • The vehicle could be impounded.
  • Fees are required for license reinstatement.

How to Find Affordable Minimum Coverage Insurance in Your State

To secure affordable car insurance, prioritize meeting your state’s minimum coverage requirements. While these policies might be cheaper, they often need more comprehensive and collision coverage, leaving potential gaps in protection. To navigate cost-effective options, consult resources like MoneyGeek, which highlights budget-friendly insurers by state. For example, North Dakota’s Nodak Mutual averages $17 monthly, and in Idaho, GEICO offers around $19 monthly coverage. Always ensure your chosen policy aligns with both affordability and essential coverage needs.

You can use Beem to find the best insurance quotes to help you make the right choice.

Cheapest Minimum Coverage Insurance Company in Each State – On Average

There are some of the best highlights of each state’s most budget-friendly minimum coverage insurance provider, such as Nodak Mutual in North Dakota.

StateCheapest CompanyMonthly Premium
AlaskaGEICO$38
CaliforniaProgressive$40
DelawareState Farm$66
FloridaGEICO$49
GeorgiaGEICO$60
HawaiiGEICO$28
IdahoState Farm$24
IndianaErie$24
KansasAmerican Family$31

Drivers in These States May Be Eligible for State-Funded Programs

If you’re in certain states and finding it tough to cover car insurance, there are state-backed programs to help:

  • California’s CLCA gives a basic coverage plan with 10/20/3 limits.
  • New Jersey’s SAIP offers cheaper medical coverage for those with low incomes.
  • Hawaii’s AABD provides free car insurance to eligible seniors and some with disabilities.

Residents in these states might qualify for such state-sponsored insurance assistance programs.

Factors That Go Into Determining Car Insurance Premiums

Let’s discuss some factors to determine and get car insurance premiums:

  1. Driving Record: Your history of accidents, tickets, and violations significantly influences premiums.
  2. Age and Gender: Younger drivers and males often face higher rates due to statistical risk factors.
  3. Vehicle Type: Your vehicle’s make, model, age, and safety features impact insurance costs.
  4. Location: Where you live affects rates; urban areas might have higher premiums due to increased risks.
  5. Credit Score: A higher credit score can lead to lower insurance premiums in many states.
  6. Coverage and Deductibles: The type and amount of coverage you choose and deductible levels affect costs.
  7. Driving Habits: Mileage driven annually, purpose of use (e.g., commute, pleasure), and storage location matter.

How to Make Car Insurance Cheaper With Discounts

Car insurance discounts can lower premiums significantly, aiding affordability. Eligibility often hinges on personal, vehicle, and driving-related factors.

Personal Driver Profile

Your age and location can determine eligibility for specific car insurance discounts based on personal driver profile criteria.

Vehicle Equipment

Safety features like airbags and anti-theft systems qualify for car insurance discounts based on vehicle equipment considerations.

Driving History and Habits

Maintaining an accident-free record and good driving habits often result in significant car insurance discounts based on history.

Payment Options

Choosing full payments or paperless billing can reduce car insurance premiums based on preferred payment options.

Policy

Bundling car insurance with other home or health insurance policies can yield significant discounts based on combined policy benefits.

When to Consider Pay-Per-Mile Car Insurance

If you don’t drive much, some wallet-friendly insurance options exist. Companies like Metromile can be a better deal than usual, especially if you’re clocking less than 26 miles weekly.

The Different Types of Pay-Per-Mile Insurance

Pay-Per-Mile Insurance comes in a few flavors: Pure Pay-Per-Mile charges you based on how much you drive; Behavior-Based tweaks your rates depending on how you drive; and Hybrid mixes elements of both.

Pure Pay-Per-Mile Insurance

Charges a base rate in addition to a fee for each mile driven.

Behavior-Based Car Insurance

Premiums are determined based on the driver’s driving performance.

Hybrid Policies

Blend features of both pay-per-mile and behavior-based insurance models.

Use alternative transportation temporarily

If you’re feeling the pinch from steep insurance prices, think outside the box. Try hopping on public transit, sharing rides with others, or even biking or walking for shorter trips. And if you occasionally borrow a friend’s car, check out non-owner car insurance. It’s often more affordable and ensures you’re covered, avoiding any lapses that could increase future rates.

Conclusion

Finding affordable car insurance isn’t easy. It takes effort, research, and smart choices. But you must know what to do if you can’t afford car insurance. By knowing what’s out there, using the resources available, and driving responsibly, you can get the right coverage without breaking the bank. Stay ahead, be informed, and make wise decisions for a stable future.

You can use Beem to find the best insurance quotes to help you make the right choice. Auto insurance with Beem covers damage to your vehicle, other vehicles or property, and injuries to yourself or others. 

FAQs

What can I do if I can’t afford car insurance?

Consider adjusting coverage levels, exploring discounts, or researching state-funded assistance programs.

Do I still need car insurance if I don’t drive often?

Yes, most states require insurance for registered vehicles; explore pay-per-mile or minimal coverage options if driving infrequently.

What if I can’t afford a down payment?

Look for insurers offering flexible payment plans or consider options like pay-per-mile insurance to reduce initial costs.

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Author

Picture of Aniket Kulkarni

Aniket Kulkarni

A seasoned Product Manager specializing in car insurance content, Aniket has a passion for simplifying complex insurance concepts. His strategic approach to content development reflects years of experience in the product development industry, coupled with a commitment to providing accurate, reliable information.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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