You’ve decided to drive that new car you just bought – well, congratulations! That’s a big step in the right direction! Now all that your new car needs is a clean bill of health from your local doctor to officially register it in your name as “insured” and all the perks that come with it, such as car maintenance, roadside assistance and insurance on an expensive vehicle if the worst does happen and you get into an accident. You’re all set to start enjoying your newly purchased car. Or maybe you’d like to start using your new car for some sort of emergency and decide to buy auto insurance before you head on that trip.
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Usually, when people think of mandatory car insurance, they think of something that requires them to purchase an expensive policy if they want to be adequately covered in case of an accident. Typically, they’ll make claims such as, minimum coverage required, monthly payments as low as 29% of your monthly income, etc. while it might sound like the perfect deal of a life time, there’s a pretty big catch (or three). Here are three reasons to avoid mandatory coverage.
The first reason to avoid mandatory car insurance is because you will pay more for your policy than you need to. When you purchase a brand new vehicle, your lender typically offers a guaranteed car loan, which means you need to put down a down payment of anywhere from several thousand dollars to several tens of thousands of dollars to start off with. If you’re not a very safe driver, this could translate to hundreds of dollars extra you’ll have to shell out on your insurance premiums. Sure, insurance companies make money on your premiums, but they also make money on what’s left of your deductible if you do get into an accident – and that’s the money you’re going to have to pay first in the event of an accident.
The second reason to avoid mandatory car insurance coverage limits is because of how much the insurance company will raise your rates once you’ve already purchased it. Insurance companies have to make money by charging risk based on your past driving record and current age. This means that the younger you are and the less experience you have behind the wheel, the more your rates will go up. The smartest thing for you to do is wait until you’re at least twenty years old and have some experience behind the wheel before purchasing a car. This also gives you the time you need to build up some alternative income sources such as rental cars, which many people fail to take advantage of.
The last reason to avoid mandatory insurance is because it’s a legal requirement in most states across the country. Mandatory insurance is a tactic used by insurance companies to force people to purchase auto insurance. While it is a legal requirement, insurance companies don’t have to offer it, and they don’t have to enforce it. They can raise rates as they see fit, and if you live in a state such as Massachusetts where it’s illegal for companies to force you to buy auto insurance, it’s not hard to see why you would want to avoid mandatory car insurance coverage.
In summary, to get the absolute lowest rates possible, you should get quotes from three different insurers for both your car and home insurance. Compare the different policies and choose the one that has the lowest possible premiums without sacrificing coverage. If you’re going to be driving in Massachusetts, I recommend that you get quotes from each insurance company before you apply for coverage so that you are sure you’re getting the absolute lowest rates possible. I have personally received quotes from each of the major insurance companies that are available to you in Massachusetts without using any sha 256 encryption.