Every time we get in our car and start driving, we are in danger and there is a possibility that we will be involved in a collision or some other problem. Fortunately, this is not a common case and many people drive their whole lives without ever being involved in a serious collision or experiencing a crash. But we all want to be insured, because we never know when bad luck will hit us.
That is why car insurance is probably the type of insurance that is most often bought, in order to have financial protection in case the car is damaged or we get injured. On the other hand, you certainly don’t want to spend a fortune on car insurance. And that is why for many, the main criterion when looking for car insurance is to be as cheap as possible. While it is understandable that we all want to save money and that we hate to overpay any kind of service, cheap car insurance has its drawbacks as well as advantages. So keep reading and find out the pros and cons of cheap car insurance companies.
This is of course a major advantage and something that is the whole point of buying cheap car insurance. However, you are probably not aware of how big the savings can be. For example, if you choose cheaper car insurance for the rest of your life, you can save over 10 thousand dollars during your lifetime. You will agree that it is a very large sum of money which you can use to buy some big things.
Of course you should pay attention that the difference between the two companies is not just a few dollars a month, then it has no real value because you will save practically nothing. If the difference is so small, compare what they offer rather than the price.
If you are a reliable driver who never gets tickets and has never crashed, then cheaper companies are definitely a great choice for you. And it is very likely that when they see you immaculate record that you will get an additional discount.
On the other hand, if you are considered a high-risk driver, cheap companies may not even want to work with you. As insurance experts from Keller & Associates have told us, you will be considered a high-risk driver if you have numerous accidents, convictions, suspensions, and also if you are not experienced.
If you have an old car
If you have an old car or one that is not worth much, then it is definitely wise to work with cheap companies. Why would you pay a large amount of money every month, when it is unprofitable for you. In the end, when you calculate all the money you gave for insurance, it will be a larger amount than the value of the car.
In that case, it is enough to have some basic, cheap insurance to cover the potential costs of treatment and repairs of other people’s cars that you have destroyed. And to cover the cost of repairing your vehicle, a basic policy is enough, because on a car worth a few thousand dollars, no repair can be more expensive than a few hundred dollars.
You can potentially get an equally good service
People usually dislike cheap companies because they think the service will be bad. But that doesn’t have to be the case. It is not uncommon to get equally good service or even better when opt for companies that offer cheap car insurance. The reason is mainly that this is a new company and that it is trying to break into the market by lowering their prices. So even though it is cheap, it will not compensate it with a bad service. If you find such company, that will be a win-win situation for you.
It is almost always the case that liability coverage is very low compared to other car insurance. Liability coverage is often only a few tens of thousands of dollars, which is not even enough to cover all the costs of a minor accident. Not to mention a major accident that requires longer hospital treatment for more people, for example. So when you choose a cheap one, you run the risk that despite being insured, you will have to pay a large amount of money.
Although we have said that this is not always the case and that you can get very good service from cheap companies as well, they usually have to sacrifice something to offer you a lower price. And they sacrifice the salaries of their employees or the number of employees, which inevitably leads to the service being poor.
Either you will experience workers who are not so willing to resolve your claim quickly or there are simply not enough of them for the amount of work they have, so you will wait a very long time for your case to be completed. And until then you won’t have your own cars because you don’t have the money to fix it. Or you will have to borrow money. Neither is a good solution.
You may be left without insurance
And how is that possible? Well, many companies start their business, offer cheap car insurance and then after a while decide that it is no longer profitable for them to work and stop doing business. Some do it because they have realized that they will not be able to operate profitably, while some other companies have bad intentions from the beginning. In any case, the situation will become unfavorable for you.
So if you choose cheap insurance, be sure to check the company well before giving them any money. You can do this by looking at the reviews, then you need to check their BBB rating as well as check their financial situation. Also explore how long they operate. If you see they are around for years, they are probably respectable company.
It is clear that you will encounter a lot of pros here, but also a lot of cons. We cannot give you a single answer as to whether cheap car insurance is something you should buy. It depends on a lot of personal factors that you will need to analyze before making a decision.