What to do if you can’t afford car insurance?

Introduction

Having car insurance is required by law in most states and is essential to protect yourself financially in case of an accident. But car insurance premiums have risen significantly in recent years, leaving many wondering what to do if you can’t afford car insurance anymore. Here are some options to consider if you’re having trouble paying for car insurance.

Look into state programs

Many states offer low-cost or even free car insurance programs for low-income individuals and families. These state-sponsored programs provide basic liability car insurance coverage to verified applicants who meet certain income eligibility requirements.

To find out if you qualify for one of these programs, contact your state insurance department or do an internet search for what to do if you can’t afford car insurance or “{your state} assigned risk auto insurance.” Some common programs by state include:

• California: Low Cost Auto Insurance Program
• Florida: Florida Joint Underwriting Association
• New York: New York Automobile Insurance Plan

While state program coverage limits are lower than a standard policy, they do meet state minimum requirements and provide some protection.

Increase your deductible

Ask your insurer if raising your deductible (the amount you pay out-of-pocket before insurance kicks in) lowers your premiums. Opting for a higher deductible like $1000 rather than a lower $500 deductible can slash premium costs. Just be prepared to pay more upfront if you end up filing a claim.

Drop comprehensive and collision coverage

Comprehensive and collision policies cover repairs to your own vehicle after accidents, theft, or vandalism. They’re optional types of coverage, so eliminating them can save a fair amount on premiums. But you’ll get nothing from insurance to fix your car if you’re at fault in an accident.

Seek discounts

Insurers offer many discounts that can chip away at the cost of coverage. Things like bundling home and auto policies with one company, taking defensive driver classes, having anti-theft devices in your car, tracking mileage, and maintaining good credit can all lead to discounts. Contact your insurer to find out what savings opportunities you may qualify for if you are wondering what to do if you can’t afford car insurance.

Raise your credit score

In most states, insurers use credit-based insurance scores to set rates. The better your credit, the more you save. Improving your credit score by paying bills on time, limiting credit inquiries, and paying down debts can potentially put you in a lower risk tier for insurance rates if you are concerned about what to do if you can’t afford car insurance.

Compare quotes

Shopping around and comparing rates from multiple insurers is one of the best ways to find an affordable premium if you are struggling with what to do if you can’t afford car insurance.

Rates can vary significantly from company to company, so get quotes from national carriers, local insurers, and online insurance marketplaces. But make sure to compare policies with equivalent coverage.

Modify your coverage

Consider dropping non-mandatory coverage types like roadside assistance, rental car reimbursement, and personal injury protection to lower premiums if you are researching what to do if you can’t afford car insurance. Or opt for basic liability-only coverage if you own an older car that’s not financed.

Seek group, affiliate or “captive” insurance

Some organizations like associations, employers, or universities work with insurers to offer discounted group insurance policies. If you belong to a group like AARP, AAA, a credit union, college alumni association, etc., check to see if they sponsor special insurance programs that could help you save if you are concerned about what to do if you can’t afford car insurance.

Pay-per-mile insurance

Mileage-based or pay-per-mile programs charge premiums based on how many miles you actually drive instead of a flat rate. This can significantly reduce premiums for low-mileage drivers wondering what to do if you can’t afford car insurance. Ask insurers if they offer any usage-based programs.

Work on your driving record

Multiple driving violations like tickets, accidents, and DUIs can make your auto insurance premiums skyrocket. Slow down, follow traffic laws, and drive defensively to keep a clean driving record if you want to know what to do if you can’t afford car insurance. Taking defensive driving courses can also help offset point deductions and lower your rates over time.

Drop unnecessary vehicles

Removing recreational vehicles, extra cars, collector cars, etc. that you rarely drive from your policy lowers premiums since you’re only covering vehicles you actually use. Make sure to formally notify your insurer if you dispose of or stop driving any insured vehicles when considering what to do if you can’t afford car insurance.

Move somewhere with lower rates

Certain ZIP codes and regions have higher auto insurance rates due to risk factors like high crime, accident rates, uninsured drivers, adverse weather, and claims costs. Relocating even just outside city limits can sometimes lead to lower premiums if you are researching what to do if you can’t afford car insurance.

Talk to your agent

Have an honest discussion with your insurance agent explaining why current premiums have become unaffordable if you want help with what to do if you can’t afford car insurance. They may be able to adjust your policy, apply discounts you’re actually eligible for, place you with a different carrier, or set up a payment plan that works better for your budget.

Consider part-time usage

If you only drive your car occasionally like on weekends, you may qualify for an insurance policy with much lower mileage allowances if you are concerned about what to do if you can’t afford car insurance. Pay-by-the-day plans are also available that let you activate coverage only on days you actually drive. Just remember coverage gaps are illegal.

The cost of car insurance keeps rising, making it difficult for many to afford essential protection. By exploring discounts, adjusting coverage, improving driving skills, and shopping around, you can hopefully find ways to lower your premiums while still meeting state legal minimums if you are wondering what to do if you can’t afford car insurance. Reach out for help if you’re struggling – it’s important to stay insured.