Should you cancel your auto insurance?

Make sure you are paying the lowest premiums by comparing prices online. Enter your zip code above and compare coverage in your State versus many carriers.

Times are tough. Red notices are piling up. Collectors are calling. What to axe from your budget? There are several things to consider before you cancel your auto insurance.

Do you think you’re a good driver? Many do, but are not! Only the most defensive, broke, and considerate drivers should even think about driving without coverage, out of necessity (not choice). If you are broke, read my article if you must cancel your auto insurance.

Is your car fully paid for? In most states when financing a vehicle, you’re required to carry full coverage insurance (comprehensive and collision).

The DMV may be notified in your State, if you cancel your policy. Your state may have an automated system to report you as uninsured. And that same automated system may send out a notice requesting proof that you were re-insured.

Personal story: I was about 20 and didn't think I needed car insurance. I hit someone (my fault) and ended up paying $7000 for that accident claim. Bad move.

I recommend before canceling anything, get comparative auto insurance quotes. Maybe you save some money and have the stress of driving uninsured and having an accident.

If you get into an accident without insurance - in some states, you cannot collect punitive damages if you are an uninsured driver. Also the portion of your car insurance is for legal defense. Unless you are an auto claims lawyer, you probably won't be capable of defending yourself against a seasoned auto claims lawyer working for either the other party and their car insurance company.

Driving without insurance means driving without theft coverage. Car jackers incomes have gone down with the rest of us. You might be next. Also check to see if your car is one of the most stolen.

If you have no collision coverage, you will have to pay to have your car towed to the body shop since your car will not be covered in an accident.

Uninsured motorists liability coverage functions as life insurance (for your survivors) if you are killed in an accident.

Car insurance contains a medical payments option that can be used for your medical bills in case of an accident, even if you don't have regular health insurance. Look at the number of medical bankruptcies, many from auto accidents.

There may be other things you can sacrifice, like Cable TV, reduce your cell phone minutes, don't buy lottery tickets, reduce eating out, etc.

Should you cancel your auto insurance? - Not if there are other discretionary items you can cancel.

My best advice I can give you to cheapen your auto insurance is to improve your credit, don't pimp your ride, and clean up your driving record. Many auto insurance sites are just designed just to get you into a policy or resell your personal info to many agents. My site is full real world of tips you can use, without the weird financial language. Auto related insurance facts:

• The cost of the average disabling injury caused by an auto accident is $35,000.
• The average annual premium for American drivers is $785. This varies from a low of $557 in Iowa to a high of $1146 for Drivers in New Jersey.
• The average cost of an auto accident resulting in one death is over a million dollars.