When buying car insurance, it’s tempting to hope for the best and go for the company that’s offering the lowest price. If you do, several factors could put you at risk of being without a car or becoming financially worse off in the long run. Many policies that cost less upfront can end up leaving you liable to much higher fees in case of an accident, or worse, not covered at all. Some of the factors to take into consideration when choosing the right insurer include:
Something to watch out for when it comes to cheaper monthly car insurance is higher deductibles. If you pay a little more per month for a lower deductible, it means you spend less out of pocket in the eventuality you have to make a claim. With high deductibles, you may need to pay out a significant amount of money before the insurance even kicks in.
Low-Quality Customer Service
We’ve all experienced a company that doesn’t prioritize excellent customer service, and it can be one of the most frustrating and inconvenient aspects of dealing with a cheap insurance provider. In some cases, insurance companies might offer less support if you only opt for liability insurance as opposed to a more comprehensive plan.
If you’ve just been through the trauma of a car-related incident, the last thing you need is a company that is difficult to get hold of or agents who lack training. In a time of need, empathetic and knowledgeable customer service can make all the difference.
A Cheap Policy May Only Cover the Other Driver
If you opt for a cheaper policy that only covers liability, the insurance will pay out for the other driver’s vehicle, passengers and property but not the policyholder’s damaged vehicle. Additionally, those who don’t have the money upfront to repair their car will have to save up and won’t be able to drive until they can afford repairs themselves. Paying a little extra for comprehensive insurance from a reputable provider can save you a lot of trouble and money in the long run.
High Crime Rates and Dense Population
If you live in a state that has a high crime rate, or even in a city or area that is densely populated, the probability that you’ll have to make a claim is much higher. If you opt for low-quality insurance or a plan that doesn’t offer extensive coverage, you could find yourself unable to cover the costs of repairs. You can expect to pay a little more if you reside in an area like this, so trying to get a rock-bottom price could see you in a vulnerable position for higher personal costs down the line.
If You Drive Often, You Need to Be Covered
For people whose job involves driving regularly, or if you spend a lot of time on the road visiting loved ones or attending conferences or social events, a thorough insurance plan is imperative. If you spend more time on the road, your chances of being involved in an accident are higher, and therefore the quality of your car insurance is a bigger priority.
Liability for Additional Services
Usually, when you pay more, you’re paying for additional coverage. For example, a policy that offers $100,000 in liability coverage is going to be more costly than one that offers $40,000. Including extras such as comprehensive and collision also adds to the cost.
While it may seem like a good idea to save a quick buck at this stage, if you get into an accident, you could find yourself in trouble. Forty thousand dollars is unlikely to cover the other driver’s medical bills, repairs and damages, which would leave you personally responsible for finding the rest.
New Car Drivers Should Protect Their Investment
Replacing a brand-new car is extraordinarily pricey, so it’s a wise decision to carry comprehensive and collision insurance for at least a few years. Plus, with a cheaper plan, the amount the insurance company pays out is not usually enough to cover your auto loan.