No one wants to pay for insurance. People are always looking to cut costs and save money, and one of the ways to do this is to buy the cheapest car insurance available. That’s because many believe they are unlikely to need insurance and only buy the minimum cover or the most affordable option. Still, accidents happen when you least expect them, and without adequate insurance cover, it can be a massive financial burden.
While purchasing liability cover if you own a car is a legal requirement, it may not be enough. Liability insurance only pays for the damages you cause to the other vehicle or property when a crash is your fault. If your car or property is damaged or you suffer injuries, the costs incurred will be at your expense.
Reasons Why You Should Not Opt for the Cheapest Cover
When shopping for insurance, the plan you choose must provide the right amount of cover. Skimping on buying the right insurance can cause more harm in the long run as cheaper plans may not provide all the necessary benefits and offer lower coverage.
It’s best not to opt for the cheapest car insurance for the following reasons:
A common way to keep insurance premiums low is to increase the price of the deductible. It means if you’ve been in an accident, you will have to pay a large amount for your car’s repairs before the insurance pays.
It may seem a worthwhile risk since many people think they are unlikely to be involved in an accident. Still, financially, paying a slightly higher premium every month is less of a burden than having to pay the hefty deductible. If you choose to take on a plan with a high deductible and low premiums, ensure that you save enough money to cover the costs of damages in case you’re involved in an accident.
Less Coverage and Fewer Benefits
Another common way to keep the cost of premiums low is to cut down on the coverage the plan offers and take fewer benefits. It may mean that even if you’re involved in a minor accident, the coverage may not be enough to repair your car. If you don’t have the savings to fix your vehicle, you may be forced to be without a car until you’ve saved up, or you may have to take out a loan which can cost much more in the long term.
If you’ve been in an accident and need your car repaired, the last thing you want is to struggle to get your insurance claim processed and a delay in your vehicle being fixed. It may not be the case for all cheap plans, but often, cheap insurance comes with poor, inefficient customer service.
Insurance companies sometimes provide better service and customer support to clients with more expensive policies, so it’s worth spending a bit more to get superior service.
Terms and Conditions
Cheap insurance may also have unfavorable terms and conditions that can be highly inconvenient. For example, the insurance may only pay for the repairs to your car if you take it to one of their repair centers.
Depending on where you are based, it may be in an inconvenient location, or you may be unhappy with the quality of the work or service at the repair center you have to use.
Comprehensive and Collision Cover
While it’s only mandatory to have a liability cover, it’s also worth investing in comprehensive and Collision. These insurance types are considered add-ons, as you can’t purchase them separately. You can choose to buy either comprehensive or Collision or both. Most insurance companies will offer all three as a package, called a full cover.
Even though comprehensive and Collision are not mandatory, banks will require full coverage if you want to take a loan to buy a car.
Comprehensive insurance covers the cost to repair your car when it’s been damaged, but a crash is not the reason. For example, if your vehicle was vandalized, damaged by a natural disaster like a flood or fire, or a heavy object like a tree branch or rock fell onto it.
Collision will cover costs to repair your vehicle damaged in a crash, whether it was your fault or someone else was responsible. It will also pay for repairs if you hit a stationary object or vehicle.
Save Money on Car Insurance
If your budget is tight and you’re wondering how to save on auto insurance, consider the following:
- Shop around for quotes and compare prices
- Make sure your coverage is always active – never allow it to lapse
- Improve your credit score
- Take a defensive or safe driving course
Aubrey Moore is a freelance writer and home renovation enthusiast living in New York City. She keeps up to date with the newest trends and then passes this knowledge on to her audience. When Aubrey isn’t researching and writing, she is out playing volleyball with her friends.