To avoid paying car insurance, you can save up a significant amount of cash by investing it into a 401(k) or other retirement plan. Many people are surprised to learn that car insurance is actually more expensive for drivers who are not covered by insurance. In fact, drivers without car insurance pay up to 18% more for their premiums than those who are continuously insured. If you’re wondering how much money do you need to not have car insurance, consider the following:
You may want to consider raising your deductible. A high deductible can lower your premium, but it also increases your risk. For example, if you have a $1,000 deductible and a $250 repair, it makes no sense to file a claim. If you’re looking to save money on your insurance, you’d be better off saving up the extra money each year for an emergency fund or debt snowball.
You need at least $50,000 of liability insurance coverage in most states. Many states require higher limits, so if you want to drive legally, you should get more than that. Many states also require you to purchase uninsured motorist coverage, PIP, and MedPay. An excellent rule of thumb is to complement the state’s minimum auto insurance requirements with an amount that matches your net worth. You can also increase your liability coverage limits, or add optional coverages.