AUTO INSURANCE FOR TEENS AND ADULTS: EXPLAINED.
Teenagers usually underestimate the importance (and the cost) of getting car insurance when first beginning to drive. If you are under a certain age, car insurance becomes exponentially more expensive, as you are now considered to be an “at risk driver.” So, why do people actually need/benefit from getting car insurance?
How will getting car insurance benefit me?
First of all, it’s illegal to drive an uninsured car. But putting that aside, car insurance can help you way more than it can hurt you. Theoretically, if your wallet is thick enough to be used as a metaphorical safety net, you might not need insurance. In that case, if/when the time comes, you could just pay everything out of pocket. That includes: accident repairs, , damages, rental cars, towing charges, lawsuits, attorney fees, and medical bills.
As you can probably imagine, most people probably wouldn’t be able to cover all these costs. What you lose from paying car insurance doesn’t even come close to the amount you could potentially be responsible for paying get in an accident without being insured.
Banks make insurance mandatory to lease
Another obvious reason for getting insurance is that banks make insurance mandatory to lease a car. In fact, almost all companies require full coverage insurance which is the highest form of insurance and which exceeds the legal requirements. This is because they want to eliminate any form of risk involved in leasing you a car, and protect their investment.
Lastly, the basic reason that most teenagers don’t want to get car insurance is because they are so confident in their whopping 2-3 years of experience driving that they couldn’t possibly get into an accident. Even if that were the case, you can easily get hit by another car. If you get into an accident where you’re not at fault and the other driver’s insurance isn’t adequate enough to cover your repairs and medical bills, you will have to cover the cost.
Types of insurance
- Liability: This insurance is becoming super crucial to obtain as people are pursuing legal action against at-fault drivers more and more frequently. Trying to pay off these bills on your own might actually ruin your life.
- Comprehensive: this type of insurance protects against non-collision damages, vandalism, theft, and natural disasters and pays for replacement vehicles.
- Collision: this type of insurance protects against repairing costs of damages to your own vehicle.
- Medical: this type of insurance pays for yours and another party’s medical bills as per need after an accident.
- Uninsured motorist: This type of insurance is important when getting into an accident with a driver who doesn’t have insurance or doesn’t have enough insurance, and you end up getting damage to your vehicle.
- Towing and labor: this type of insurance comes in handy if your car gets towed – this covers the cost.
- Rental reimbursement: If you’ve ever been in an accident, you know how frustrating it is to not have a car. This insurance covers the cost of a rental car while your car is being fixed.
- Gap Coverage: If your car gets totaled due to theft, an accident, or spontaneously combusts, this insurance will come in handy. It covers the difference between what the market value is for your car and what you paid for your car. Important.
How much insurance do teens need?
Oftentimes, because of the illusionary invincibility of teens, they think that they don’t actually need insurance and will subsequently only get the lowest requirement of insurance necessary to remain within a legal boundary. But regardless of legality, you need to choose which type of insurance is best for you, your lifestyle, and how much risk you are willing/able to take on.
Can I make my insurance go down?
A lot of people just raise their deductible to lower their monthly payments. The problem a lot of people run into though, is when they actually get into an accident they cannot afford to pay off the deductible they had previously set. Yikes.
Do your research on discount options insurance companies may offer – most insurance companies will offer discounts for teens with a certain GPA, a Driver’s Ed certificate of completion, safer cars, and small sensible cars as opposed to flashy sports cars (kind of prejudiced, we know).
Generally speaking, if your score is more than 700 you could be getting great discounts.
If a teen is under 18 years old, they can’t buy insurance on their own and are placed under their parents’ policy (which is actually in your favor, as separate policies would be more expensive). Because of this, a lot of teens might think that not informing their insurance companies that they are driving their parents’ vehicles might save them money in the long run, which it might, if they are never involved in an accident. If they are involved in an accident, the insurance company not only won’t cover the cost of damages and legal bills, but they will also definitely drop the parents’ insurance plan. Not the move.
All in all, insurance is an important factor of driving that no one really wants to deal with, but it definitely pays off in the long run.
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