You’ve likely heard the adage “you get what you pay for” and, when it comes to your car insurance, nothing could be more true. While it’s one of the few things you hope you never have to utilize, there may come a time where you need to put your policy into action.
When looking for a car insurance policy, you may be tempted to make your decision purely based on your monthly or annual premium. While you may end up saving hundreds of dollars in the short-term, you may not be pleased when it comes time to utilize your coverage as you are responsible for high deductibles or costs beyond your coverage limits.
The real cost of cheap insurance
While you may not be required to pay as high of a monthly premium, you may end up paying more in the long run when it comes time to utilize your insurance.
The four main reasons buying cheaper car insurance doesn’t always result in better car insurance include:
Higher deductibles. While a deductible of $500 or more may not seem like a big problem should you need to utilize your coverage for vehicle damage or repairs, a major crash or incident that results in a physical injury can cost hundreds of thousands, even millions of dollars, and you are liable for anything beyond what your coverage offers. In the event of lawsuit, you could pay more than just money, losing your assets to cover the damages.
Reduced coverage and overall protection. With lower-cost insurance, coverage options will be reduced. Basic liability insurance may be one of the least expensive options, but should an incident occur with an uninsured motorist or medical expenses are required, you will be footing the bills.
Less support. In addition to increased deductibles and reduced coverage, insurance providers who specialize in low-rate insurance may offer reduced support. Claims may take longer to submit and customer service may be poor, resulting in increased frustration. Needing to monitor a claims process can also end up taking quite a bit of your time.
Reduced or no perks. While not a deal breaker, some of the higher-priced policies with full coverage options often come with additional perks, such as roadside assistance, complimentary rental cars, and travel discounts. This can save you on monthly fees for separate roadside programs as well as ensure peace of mind when traveling.
Reducing rates without reducing coverage
If you still want to find ways to reduce your rates without giving up your coverage is to inquire about possible discounts, such as veteran or active military, student or teacher, and more. These discounts can help to reduce your rate, while allowing you to maintain excellent coverage.
Be sure you get exactly what you pay for with your car insurance. Shop around and always compare more than just premiums when selecting providers and coverage options.