Although the title of this article is a parody on Shakespeare’s Hamlet lines, it is not funny about the reality that the current state of our economy is in dire straits. Although there are signs of improvement, it is still hard to find work for thousands or thousands of people. To survive until you can find a job, it takes perseverance, patience, and a lot of faith. Many will seek out ways to reduce expenses in all possible areas.
This isn’t just the case for the unemployed. People who appear financially secure are making cuts out of concern about the future. Surprisingly many people have decided to cancel their car insurance in order to save money. This is a smart decision. It is not. Let’s take a look at the reasons why.
The Impact of Risk on Car Insurance Prices
Before we continue, let’s say a few words about risk. Risk management is essential to the management and cost control of car insurance premiums. It is easy to grasp the concept of risk and its meaning.
It can simply be described as the possibility of something going wrong. Insurance is all about probabilities and statistics. What would be the likelihood of losing money for a particular action or category? Consider this example for repair work. What of the following cars would you choose to have repaired in an accident? Is it a Ford, or maybe a Bentley?
It is simple. The answer is obvious. This is just an example. The insurance industry will reward any category or action that they deem to be more risky.
Consider risk from a personal standpoint. We said risk simply means the possibility of something going wrong. Actuaries are employed by the insurance industry to help with risk management.
They combine strong analytical skills with business knowledge to manage risk programs. You, as a driver, can cancel your automobile coverage. This will expose you and your family to severe legal risks, untold liabilities and financial ruin.
No matter if you are at fault, there are still risks. These are the risks.
At Fault and Car Insurance Cost
You could be held responsible for any bodily injury or property damage caused by an auto accident. Legally, you are liable. Consider what your legal responsibility would be if there was no car insurance.
How would you pay if you were sued by the victims of an accident? Your assets would be used by the court to pay any damages. It would be very serious if only one person was involved in the accident. But what if more people were involved? What if the pedestrian was also hurt in an accident? You would also be responsible for the repair of damage to other vehicles, which could lead to thousands of dollars.
Car Insurance Cost
What happens if you are partially or not at fault in an accident? The costs of defending yourself against legal action can be high if you don’t have automobile insurance.
What if your injuries were sustained in an accident where the other driver was at fault? But their insurance did not cover you. Worse, what if the driver didn’t have any insurance? Even though you may not have been at fault, that doesn’t mean you can’t incur serious medical expenses.
How about your car? Your vehicle could also have suffered significant damage and will need to repaired. If you don’t have the right automobile coverage, these repair costs will be out of your pocket.
Get new quotes for car insurance annually
Do not neglect to check your auto insurance coverage. You can see from the above that the cost of not having auto insurance is far more expensive than the savings you could realize if you did.
People become complacent about car insurance costs and don’t review or make any changes. It is difficult for them to review their car insurance coverage and get new quotes. It is possible to feel proud of what you have achieved, because we all work hard for what it is we have. Avoid unnecessary expense and potential loss. Keep in mind that your life circumstances may change, which could affect the cost of your auto insurance. Did you get married? Have you had to change jobs that affected how far you drive to work? Did you get a new car? These and other factors could impact the cost of your automobile insurance. Are you looking for the best prices on car insurance? Take control of your finances and be proactive. You should review your policies at least once a year and get new quotes for car insurance. You might be surprised.
Edward Ferrell graduated from Auburn University and has over 20 years of experience in technology and financial services. With the intention to concentrate on niche markets, he recently founded his own marketing and eCommerce company.
Edward knows from a deep personal level that life is full of challenges. Edward believes that while some of the challenges we face can be attributed to our bad or good decisions, others are just waiting for us.