Reader’s Question:

My boyfriend says that I don’t really need to get car insurance for my beetle. He says that these insurance companies are just big scams that’ll drain money out of my pocket and then hide behind loopholes when I get into an accident. It’s just better to keep the money and save it up for when I do get in an accident… it’s more dependable that way. Is what he says true?

Kisha

Sacramento, CA

It is possible not to pay insurance in California, unlike in other states that mandate car insurance for all drivers. However, you need to make a cash deposit of $35,000 with the department of motor vehicles if you don’t want to get in trouble with the law. That’s the condition you need to fulfill in order to prove that you are capable of paying for any damages that you may incur when you get into an accident. Those damages don’t even include damage to your car or to yourself. It’s about paying for the damages you cause to other people.

Regarding your boyfriend’s view that insurance policies are just scams, he’s mostly wrong and somewhat right about it. Mostly wrong because decent car insurance companies know their responsibilities and will stick to what’s been said in their contracts. Somewhat right because less-decent car insurance companies will make any excuse to avoid paying up when you do get in an accident.

Getting car insurance is definitely less painful to the pocket than plunking down $35,000 in one go and then having to pay for damages to your own car and health when you do get into an accident. You just need to be intimately familiar with the terms on your contract to know when and where the insurance company will step in to pay up.

That’s why it pays to read before you sign… especially for insurance.