Getting a driver’s license is a bit like that line Alec Guinness gave to Mark Hamill in Star Wars after his character, Luke Skywalker, had successfully used a lightsaber for the first time. He said, “You’ve taken your first step into a larger world.” At the time, the character of Luke Skywalker thought this meant a world brimming full of adventure and amazing experiences, with great friendships, and overcoming terrible trials. Sure, there was some of that, but there was also war, death and getting your hand cut off by your own father, only to end getting zapped with lightning by some cranky old guy who couldn’t be bothered to get out of his bathrobe when he was meeting you.
All of which is to say that sure, getting a license and learning to drive opens up some doors to adventure, but there’s also some tedium and hum drum reality that comes with it.
Car insurance is one of those things. Sooner or later, you’re going to have to face this. If you have really nice parents, you may not need to deal with this for quite some time, but even then, that’s just a holding action. Even a one percenter will eventually have to pay his or her own auto insurance, or get the butler to do it.
So What’s Car Insurance?
If you’re young enough that you have to ask this question and genuinely have had no experience with it yet, there’s a mixture of sadistic pleasure and envy in being the one to break this to you. Car insurance is the money you pay to an insurance company, every single month, as “rainy day” measure in the event that something happens to your car, such as you getting involved in an accident. If your insurance is paid up, this means that the insurance company, not you, will cover the expense of repairing the damage to the car. If you get into an accident with another car and that car also gets wrecked, insurance—not you—will pay for that too.
Of course with a general concept like that, you’d think that most people would then go crazy, trying to get into accidents all the time and letting the insurance companies sort it out, but there’s a catch. For one thing, every time you get into an incident where insurance has to get involved, then the premium—that is to say the amount you have to pay for that insurance every month—goes up.
“Ah,” You’re thinking. “If that’s the case, then I’ll use my super-genius IQ to simply… NOT get insurance! Problem solved!” Except that the lawyers and your own state have already thought of this. In order to legally drive, you are LEGALLY REQUIRED to have some kind of auto-insurance. So sure, you can continue to drive without insurance, but if you are ever in an accident, or pulled over by the police for a speeding ticket, they can just ask for the proof of insurance you ‘re supposed to have stored somewhere in your car. And, of course, if you claim you forgot it, they can just run a check on their computer network anyway to confirm whether you’re telling the truth or not. In some states, you can actually pay a fine for simply not having the proof of insurance producible somewhere in your car.
So basically, if you decide to drive without car insurance because you think it’s a pointless expense, or it’s too expensive for you already because you got into too many accidents, you’re breaking the law. You had better hope that you drive flawlessly and never get into an accident or attract the attention of the police because if you get busted without insurance, you’ll get busted even harder. And if you’re driving without insurance because it got too expensive due to your previous accidents, odds are you haven’t improved enough to stay out of trouble.
Time To Start Picking
If you’re very young, and just learning to drive, for now, your insurance is probably all covered by your parents. You’re still living at home, you’re a minor, so you’re not old enough to be able to even legally apply for your own auto insurance. Of course, it’s not going to be that way forever.
If you’re older and a young adult, you may already be financially independent enough that you are getting your first car and picking out insurance for yourself. Congratulations, you’re a grown-up, it all goes downhill from here. Maybe.
You’ll need to look at your available options with different insurers in your area. Things to look at will be the types of insurance offered versus what you actually need. There are a lot of different forms of car insurance, but not all of them are mandatory, so make sure you have a good idea of what you are legally required to pay for, versus what is “kind of nice to have, just in case.” You may actually want that just-in-case stuff, but if you don’t have the budget for it, don’t get it accidentally bundled into your auto-insurance policy.
There are quite a few things that can have an effect on the type of insurance you get, and the sort of premiums you will pay every month. Things like the age of your car, whether it is leased or currently being financed, and the type of use the car will have can all effect your premium.
Of course, if you get into an accident, this will also affect your premium, and, depending on the severity or number of times you get into accidents, premiums can get higher, or insurance companies may simply refuse to service you, forcing you into more expensive means, such as high risk/non-preferred insurers.
Driving opens up a lot of possibilities, but it also means that you’re entering into a world of financial red tape. But once you get behind the wheel of a car, you have to start taking more responsibility for yourself, and insurance is one of those things that comes with the territory.
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