Is Car Insurance Worth It?

Fran Majidi
November 3, 2020

Car insurance is a big cost in owning a car and averages about $1,550 per year. In all states all drivers are required to have some sort of insurance to protect themselves and others on the road. Even though it’s illegal to drive uninsured, some people do it. Many drivers raise the question, Is it worth paying for car insurance or is it just better to drive without it?

First thing to note is that car insurance is required in all 50 states just like a driver license. The United States requires that drivers have car insurance because it serves as financial protection in case of an accident. Car insurance protects your vehicle and provides financial relief to victims of damages or injuries that you cause. For this reason states require that you have insurance but every state has their own minimum requirements. For example in California the minimum car insurance requirements are that you have to at least a minimum liability of

  • $15,000 for injury/ death to one person
  • $30,000 for injury/death to more than one person
  • $5,000 for damage to property

As mentioned earlier, it’s illegal to drive without car insurance. However, this is not the only reason why it is important to be insured. Car insurance protects you against costs associated with car accidents such as car repairs, medical expenses and certain legal contracts. If you are involved in a car crash without car insurance, you will be responsible for repairing your car, paying medical and financial costs. Obviously these types of costs can be very expensive depending on the severity of the accident.

In a study done by the Insurance Research Council in 2013, the average insurance claim for bodily injury was around $15,506. Depending on your car insurance, this cost can be covered partially or fully. If you did not have car insurance and caused the accident then you will be paying the entire amount out-of-pocket on top of large fines for driving without insurance. You’ll have a huge debt to pay that could have been avoided by having car insurance, which would have paid most or all of the damage cost.

Under the law, you are liable for any damages done to other drivers and their properties. When you do not have enough money to cover the cost then you will be subject to charges that could result in you going to jail or have your paycheck garnished until you pay off your bill. These are scenarios that drivers would definitely want to avoid because they can be very costly.

Car insurance is definitely worth having because it can protect you from accidents that are too expensive and for which you are unable to pay.

In all states, except Virginia and New Hampshire, drivers are required to drive with proof of insurance. If the police stops you and you are not insured then that means you run the risk of:

  • Fine that can cost around hundreds to thousands of dollars.
  • Your license gets suspended.
  • Your car gets impounded.

From this list of possible punishments we can see that it is very risky and costly to drive without insurance. For example, to recover an impounded car in the city of Los Angeles it costs about $133 for the tow, $115 to release the vehicle, and $45.65 for each day the car is in storage which adds up to be a hefty amount to pay. These fees can be avoided if the driver has insurance which makes it worth it to have car insurance because you can avoid fees like this and feel protected when driving.

Find Affordable Car Insurance

Many drivers may argue that they are safe drivers and shouldn’t need to worry about having big accidents. However, we are all at risk of making driving mistakes. According to the Centers of Disease Control, it is estimated that around 32,000 people are killed and 2 million are injured each year from motor vehicle accidents. Car accidents can be fatal or leave lasting injuries. The bills associated with having an accident are expensive and can cause bankruptcy. But with the right type of car insurance you can feel safe to drive knowing that you are covered in case of an accident.

But Is Cheap Car Insurance Worth It?

There are cheap car insurance plans that are a much better option than driving with no insurance. But first, remember that each state has their own requirements for car insurance. But don’t worry, car insurance companies are required to sell coverage that meets the state requirements. This all means that the cheapest car insurance that companies offer will satisfy and be legal for you to drive.

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