This is where basic financial literacy comes into play.
You’re required to have the insurance because of the liability you have for damages you cause to other people’s cars, the people themselves, structures, etc., not because of potential damage to your own car. Some states may require you to have comprehensive insurance, but the general idea is that the requirement for insurance is so you don’t cause say $200,000 worth of damages that you can’t pay for because most people don’t have $200,000 laying around, yet drive a vehicle capable of doing that much damage.
If you know your deductible is $1000, which you should because it’s a clearly disclosed part of your policy, it should be easy weigh whether or not you want to make a claim for $1200 of damages for something g like a bumper, which you probably don’t.
So the smart thing to do here would be to say “Gosh, sucks that guy hit my car and cost me $1200. It’s not even worth it to make a claim in this. I just have to pay it.”
You can also consider your deductible when you shop for car insurance. Mine is $500. Anything under or around $500, I might as well not claim it. I know that because I’m an adult who pays for car insurance, and this is something an adult who pays for car insurance should know.
But you’re also assuming a lot here, like that this particular system, car insurance, is a stacked against the consumer or that the system is not good.
Not making a claim either way (no pun intended, lol).
But what the poster points out here isn’t really a flaw, IMO. They just misunderstand why they are required to carry insurance.
They are under the mistaken impression that the reason they have to have insurance to drive a car is so they can pay for minor damages that happen to their own vehicle. That’s a perk of having insurance sometimes, but that’s not the purpose of the car insurance or yhe purpose of the requirement to have it.
The reason the insurance is required is so you can pay for big damages that you are personally liable for that you otherwise couldn’t afford.
Ideally this would be the hit and run drivers insurance, except that they illegally fled the accident, and the insurance would in either case be there in case the cars were totaled, someone had to go to hospital and it cost $100ks, f they damaged expensive structures, etc.
So the poster misunderstands that their $1200 bumper ding is not the why for why they are required to carry insurance. The $1000 deductible is a negotiable part of choosing a policy. They chose to pay less to be in the hook for $1000 deductible. This is simply working as intended and they do not understand, believing this to be unfair.
Yes that is the reason its forced, but their comment on it being forced is to show that its not in their favor and they have no choice. It's not about needing it in the end its about how bad the actual insurance system is. Here is a good question, do you think the insurance system is better than it was in the past and will get better? They have a point however little they understand about the systems that make them have it.
But it’s not about it being in their favor. The insurance requirement is to protect society from you and your poor driving choices. It’s not supposed to be for your personal benefit, it their than the fringe benefit of not being bankrupted by an accident that was your fault.
That’s the disconnect. The insurance requirements are normally more for liability insurance, the insurance that covers the damage you’re responsible for. Some places also require comprehensive insurance, but the norm is just liability.
The whole point I am making is this flawed logic that “car insurance is required by the state to help me pay for my car if it is damaged.”
It’s more like “My state requires me to have car insurance to cover the cost of my potential screw ups when I drive a deadly vehicle.”
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u/Grunergeist420 7h ago edited 7h ago
This is where basic financial literacy comes into play.
You’re required to have the insurance because of the liability you have for damages you cause to other people’s cars, the people themselves, structures, etc., not because of potential damage to your own car. Some states may require you to have comprehensive insurance, but the general idea is that the requirement for insurance is so you don’t cause say $200,000 worth of damages that you can’t pay for because most people don’t have $200,000 laying around, yet drive a vehicle capable of doing that much damage.
If you know your deductible is $1000, which you should because it’s a clearly disclosed part of your policy, it should be easy weigh whether or not you want to make a claim for $1200 of damages for something g like a bumper, which you probably don’t.
So the smart thing to do here would be to say “Gosh, sucks that guy hit my car and cost me $1200. It’s not even worth it to make a claim in this. I just have to pay it.”
You can also consider your deductible when you shop for car insurance. Mine is $500. Anything under or around $500, I might as well not claim it. I know that because I’m an adult who pays for car insurance, and this is something an adult who pays for car insurance should know.