Having continuous car insurance on your vehicle will save you more money than you would if you were to cancel your current policy to save on the premium.
Even when times are tough financially, dropping your car insurance is one of the worst things that you could possibly do to save yourself money. Car insurance, at least liability insurance, is required to be in place if you are going to drive your vehicle.
If you are caught without having insurance on your vehicle, not only will you be paying for a ticket, you will now be paying more for your insurance than you did before cancelling your policy. In the end you will not have saved yourself much money at all by cancelling your insurance and not keeping continuous car insurance.
High Risk Insurance for Those Without Continuous Car Insurance
If you are caught by a police officer or you have an accident and you have no continuous car insurance in place, you are both legally and financially in trouble. Setting aside the fact that you will have to pay the ticket for not having insurance coverage, any money that you thought that you would save by cancelling your policy won’t even be close to what you will now have to pay out of your own pocket.
First, if you get into an accident with no insurance and it is your fault, you are personally responsible for paying for the damages and medical bills for the other party. This can either happen with you being taken to small claims court by the other party or through subrogation through the other party’s insurance company. Subrogation is when the insurance company goes after the responsible party of a car accident to get back the money that they paid out for their insured’s damages and even their insured’s deductible.
On top of all that, you will then most likely have to carry SR-22 insurance which adds a surcharge on your now new insurance policy that you went out and got after the incident. Thought we were done there? Not even close. You will also be placed in high risk insurance which is significantly more expensive than in the standard market that you cancelled your continuous car insurance from in the first place.
The State of California Requires Continuous Car Insurance
If you live in the state of California, the state tracks your insurance coverage through a database that all insurance companies that sell in that state have to report to. If you fail to keep continuous insurance on your vehicle you are required to stop driving the vehicle and report that it is no being driven. If you do not keep continuous car insurance or at least replace your continuous car insurance with a new insurance policy within 45 days, the state will suspend your vehicle registration and you will face financial penalties.
If you don’t live in California, your state is not far behind – if not already there.
Lose Longevity Discount
One of the discounts that people can take advantage of to lower their insurance premium is a longevity discount. This discount is basically a reward to you for keeping continuous insurance with the same company. If you cancel your continuous car insurance you will lose this discount even if you return to the same company at a later time.
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