After we purchase our first car but before we drive it off the lot, we must have proof of our monthly car insurance.  When I purchased my first car I was surprised to learn that the dealership wouldn’t hand over the keys to my new Honda until I had proof of my monthly car insurance.  I thought this was a rule enforced by the law, but the dealership must also have a legal obligation. 

Since I work for a financial institution my decision to buy my monthly car insurance was very easy.  However, I did some shopping around (just in case) to compare the prices of monthly car insurance with difference financial institutions and insurance companies.  I was surprised to learn exactly how painful (and what a long process) it is to shop for monthly car insurance.  Here are some questions that we need to ask about our monthly car insurance before buying our first car.

Do I Need To Have Monthly Car Insurance?

The answer is absolutely yes.  It is a law that we must drive with monthly car insurance.  It is called monthly car insurance because the plan is charged on a monthly basis, and it can be cancelled at any time.  The consequence for driving without monthly car insurance can be anything from a monetary fine and suspension of our driver’s license, to repossession of our car and even imprisonment. 

It is a law to have monthly car insurance, but in my opinion it is a worthless expense. Within the 3.5 years that I had my car it was stolen, towed, and vandalized.  All 3 times my insurance company did not cover any of the expenses.  There is a reason that the insurance business is one of the most profitable (if not the most profitable) professions in the business world.  The reason is because there is always a loop hole in our insurance policy, and a reason for insurance companies not to pay.  Insurance companies collect more insurance premiums, than they pay out in insurance claims.  In my opinion insurance companies are like Las Vegas casinos, the house always wins.

How Much Should I Pay for my Monthly Car Insurance?

My brand new Honda Civic was my first car, and therefore I had never shopped around for the cost of monthly car insurance.  My first choice was to go with my employer since I work for a financial institution.  However, like any good consumer I did shop around.  After calling two other insurance companies and getting one online quote, I decided to purchase my monthly car insurance with my employer. It is always important to shop around to ensure that we are getting the best deal possible on our monthly car insurance premiums.  Stick to the rule of three. Always get at least 3 insurance quotes before making a decision.

How Do They Determine My Monthly Car Insurance Premiums?

There are several factors that determine the amount of our monthly car insurance premiums.  The basic factors include our age, sex, the make, model, and year of the car, as well as our driving record.  However, we can receive additional discounts on our monthly car insurance depending on our good credit history, our profession, as well as the other types of insurance policies that we have with the insurance company or financial institution.

Shopping for our monthly car insurance can be a painful and a very long process. However, in the end, it is better to have our monthly car insurance than suffer the consequences for not having it.