Times are tough and with budgets stretched thin, most people are looking for costs to cut back on or eliminate them.
Auto insurance1 is one of these expenses.
Nonetheless, in as much as car insurance premiums might seem like a drag on your finances, here are some things you need to consider.
Why You Shouldn’t Cancel Your Auto Insurance
There are days and months where capital might seem tighter than your knickers after Thanksgiving. You starting scurrying over your budget planners and excel spreadsheets to search for areas where you can cut back and give your budget some breathing space.
It’s such a daunting time of glaring at your expenses and thinking about which items need to be cut back. So, your food takeaway budget, designer clothes and shoe budget, and other treats go out the window.
The next item that most people look to cut back is motor insurance. Insurance premiums2 might seem like a financial burden, but this should be the last thing you need to cancel and here are some reasons why:
Cancelling Vehicle Insurance is Illegal
You won’t get finance for your vehicle without having a reliable car insurance policy – and not just auto insurance, but the comprehensive policy3 to be exact.
You’ll have to keep the insurance policy until you’ve settled your automobile off, so if you cancel your cover, you’ll be violating your financial contract.
Cancelling Auto Insurance Will Increase Your Future Premiums
When you cancel your car insurance policy to save cash for a few months, you might end up falling into a higher risk classification, meaning you’ll pay higher insurance premiums.
Therefore, it’s better to look into altering your policy to a plan that’s less comprehensive, more reliable and reasonably priced. In any case, some insurance cover is better than no cover at all.
Insurance Isn’t Just for the Average Driver
Today, with the current global financial slump, and with crime being on a high4, you can’t afford not to have some insurance cover. However, most people tend to assume that insurance is only vital if you’re a reckless driver – that’s a myth. Even the world’s safest driver needs an insurance cover.
You see accidents, thefts and hi-jacking can occur at any time.
Thus, when you cancel your insurance policy because you’re the most cautious driver is a bad idea. Today, the roads are populated, and therefore there are various kinds of drivers out there.
Thieves and hijackers also don’t care if you have excellent parking skills or not – provided that they can easily access your vehicle and drive it off.
Vehicle Damage Claims Are Prodigious
You might be legally responsible for more than R1000 if you drive an uninsured vehicle and get into a collision with another car – and not the costs you’ll cater towards having your vehicle back on the road, but the other cars costs of repairs and replacements. It might end being one of the most costly lawsuits you’ll ever encounter.
Even if they don’t take you to court, their insurer might end up billing you more than six figures.
However, with a reliable car insurance policy, you can have your insurance provider deal with all the required process, provided you have the right insurance plan.
Therefore, if you’re looking at your car insurance premiums budget and thinking that cancelling it is your best bet, think again! You’d rather cancel your vacation plans to the Bahamas and Dubai and instead, use that cash in paying up your monthly premiums.
If you’re looking to save up on car insurance, you can find the best car insurance by comparing car insurance quotes online.