First Car Guide for First Time Car Buyers

Since car insurance is so expensive, partiularly for young drivers, it's natural that this question should come up frequently.

You need car insurance to protect you from the risk of disasterous financial problems resulting from accidents,  personal injury and property damage, and loss by theft, fire, or natural disasters. It may seem pointless to spend so much money on something you may never need. But if you ever need it, you'll be really happy you have it.

You might avoid insurance if you had enough money to cover such problems on your own.  This is called "self-insurance." However, self-insurance is not legally sufficient in most states and is not practical for most people.

If you purchase only the minimum insurance required in your state, you may be seriously under-insured. Many of these laws were put in place years ago and the mandated coverage amounts don't reflect today's higher accident costs. For example, some states require only "10/20/10" liability coverage. This means the insurance only pays up to $10,000 for bodily injury to a single person in an accident, $20,000 for all persons, and up to $10,000 for property damages. Medical costs for someone seriously injured in a car accident can easily exceed $10,000. Damages to  an expensive luxury car can easily exceed $10,000. You can be held personally responsible for any costs above that which is covered by your insurance. Therefore, you should consider increasing your liability limits to a minimum of $100,000 for a single person and $300,000 for multiple persons.

The above mentioned state laws say nothing about collision and comprehensive insurance that covers your own vehicle. Young drivers often try to lower insurance cost by getting only the minimum liability policy required by state law. This can be a serious mistake. If you can't afford to repair or replace your vehicle in case of an accident, you need additional insurance. Furthermore, if you have a loan or lease, your finance company or bank probably requires that you have collision and comprehensive insurance.

What if I drive without insurance?

If you drive without insurance, you can be fined, arrested, jailed, your vehicle impounded, or your license revoked/suspended, depending on the laws in your state.

If you have an accident and damage or destroy your own vehicle, the cost of repair or replacement is completely on you. If you cause an accident and injure other people or damage their property, you are subject to being sued. Don't drive without car insurance.

You can get free auto insurance quotes from eInsurance.com who works with all the major insurance companies to help you find the one that has the best rates for you. You are not obligated to accept any offer.

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