Auto insurance is one of those things that you don’t really think about until it’s either time to pay for it, or you need to use it. I’m guilty of this myself. I renew my auto insurance twice a year, and if it is relatively the same price than I simply click the renewal button and send payment through. The truth is, up until about a month ago, I couldn’t even tell you what my insurance covered should I ever really need to use it. This sort of complacency could end up costing you a lot of time, money, and aggravation down the road. Not to mention, you may be overpaying for insurance despite the fact that your premiums haven’t changed much over time.
Auto insurance essentially protects the cost of repairs on your vehicle should you ever have an accident. However, most places in the world have a legal requirement that you carry some form of insurance as a driver. That means, even if you choose to scrap your car in the event of an accident, you would still be required to carry a minimum level of insurance that would protect other drivers if you were the at-fault party. That might not seem fair to you, but everyone has their accidents and it is only right that others should be financially protected in the event that you cause one.
The biggest problem with blindly renewing any auto policy is that you may not realize that you are overpaying for your current insurance plan. Most companies won’t drastically change their coverage premiums each period, but that doesn’t mean that similar coverage with another company couldn’t be much less expensive. With the available rate comparison sites on the internet, it shouldn’t take more than a few minutes of your time to price compare all of your options. I’ve heard of people saving hundreds of dollars over the course of a year just by spending a few extra minutes checking rates.
Lastly, it can be very dangerous to renew a policy without knowing exactly what your coverage entails! I say this because you could have a serious enough accident that may leave you unable to work or provide for your family. In this case, there are certain policies that will cover a period of time that you are unable to work. Many policies even come with an option for secondary medical coverage in case your primary insurance doesn’t pick up the entire cost. Or on a less serious note, you may have an accident that puts your vehicle in the repair shop for a few weeks. Have you thought about how you would get to and from work? There are several policies that allow for rental coverage so that you receive a vehicle to use while yours is being fixed.