There is a rise among people who are driving uninsured cars where several are choosing to risk life and property at the mercy of misguided perceptions and a general disregard to different probabilities.
The genesis for this callous attitude varies and some of them arise from financial burden. However, a larger section of the people opting to drive without insurance are the ones who can afford it but feel they can get away with a fine.
It is the age of information where one can buy car insurance fast online. Still, there is an observed shift of law-abiding people where few of them have cited that the rising cost of insurance has been driving them up against the wall, fixing them in the corner, and forcing them to stop paying premiums.
Fortunately, this need never be the case as there are ways to reduce the cost of staying insured and stay compliant without getting your license suspended or fined for wilful default.
Lack of comprehension about the risks involved urges people to forgo renewal of their auto insurance. Most people stay pennywise and pound foolish when they feel that auto insurance is overrated.
No one has control over mishaps and risk management is not an investment. It is a protection that one must not play around as per their fancy. If they feel the requirement is incomprehensible, then they should look up for advisory services on managing their finances better and be risk averse.
A false pretense of invincibility does not offer entitlement to individuals who want to drive but do not abide by insurance requirements. The ability to pay and get away with a fine is not going to absolve a person from staying insured.
If found to be guilty, the legal hassles and charges will increase and the driver will be categorized as high-risk. Such markings will hamper the chances of getting lower-cost insurance for a very long period.
Interestingly and sadly, there is a misguided notion among young people to stay foolish in the wrong sense about third-party insurance. They feel that in case of an accident, the insurance of the opposing party will cover the charges.
This will be the case only if their insurance coverage spans to uninsured driver’s damages. Otherwise, the opposing driver can contest the case in court and recover damages from the driver at fault in the sense of the accident.
All the above reasons or any other that follow, should not be the excuse baton for anyone who still is uninsured. So here are some tips that will help you reduce the cost of insurance so that you can drive your wheels without having second thoughts about checking your finances.
1. Learn About Discounts
Insurance providers offer several discounts. If not all of them, you may be eligible to claim some. Check out the possible list and how to avail them
a. Paperless Discount
The cost of paperwork is high and with digital solutions getting the contracting done electronically is an easier, cost-effective, and eco-friendly method that insurance companies prefer.
If you opt to go paperless and buy insurance through an app or online portal, then you will not just get efficient digital service but also avail the discount related to the online insurance product. The claims settlement of online insurance is equally good and is a good consideration.
b. Good Driving Record
A safe driver who uses a telematic device can prove their good driving skills through the data that is captured and shared with the insurance provider.
Staying in speed limits, brake application, and other defensive driving data points form the datasheet that will determine the ratio of safe driving. You will be rewarded well if the score is higher and can avail of this discount.
c. Usage Discount
If you use a car occasionally, then you should inform your insurance provider to avail the discount for mileage use. A well-maintained and less-used car raises less possibility of an accident. Insurance risk is covered as per the underwriting where less risky events lead to fewer mishaps.
Based on the usage of the car, a decent discount is offered by the insurance company provided the mileage stays within the agreed limits.
d. Student Discount
A student who maintains good grades is offered a discount till they turn 25 years of age. If your kid has a driving license, drives safely, and is good at studying, then avail of this discount.
2. Multiple Policies
If you buy home and life insurance from the same company then you can club all your policies and avail the discount for clubbing them together.
3. Improve Your Record
If you have not been maintaining your insurance, skipped payments, or got into an accident in recent times, then all is not lost forever. There are programs that one can enroll in and get their position cleared, and start afresh.
Safe driving programs are a chance to prove proactively that you are willing to improve, practice safe driving, and stay compliant so that your insurance rates come down.
4. Pay Annually
Instead of monthly payments, if a person opts to pay annually or two payments within a year, they can get a good discount for the upfront payment of the premium.
5. Coverage As Per Age
If you own an old car, instead of paying higher premiums for an old car, reduce the coverage and use the savings to be invested in an asset class that can help you fund your new car fully or partially.
As cars depreciate fast and lose their resale value with every passing year, it makes sense to save for the replacement cost rather than pay high for coverage. Using a base minimum liability coverage and directing the savings for buying a new car will be a sensible option.
Conclusion
Insurance is a risk mitigation tool that should not be mixed with investments. Staying compliant is necessary and at the same time determining the amount of self-insurance and deductibles is a tactical decision that one should take after reviewing their needs.
Article and permission to publish here provided by Mariana Wilona. Originally written for Supply Chain Game Changer and published on October 29, 2024.
Cover image provided by Mariana Wilona.