Should I buy Cheap Car Insurance? – Car Insurance Advice. Auto insurance is one bill that cannot be cut entirely from most people’s budgets. All drivers must carry insurance to own and operate a vehicle. Because car insurance is a necessary expense, it pays to shop for the best deal on coverage. Nevertheless, the adage “you get what you pay for” can certainly be true of auto insurance, and a consumer should be wary of any policy that seems too good to be true.
Why do car insurance rates vary?
Multiple factors influence the cost of auto insurance. A policy’s price is determined by the type of vehicle being insured, the state the policy is written in, and the driver’s individual driving history. Additionally, some car insurance companies simply charge more than others.
Companies must employ large numbers of people to make the company run smoothly. A company may employ agents, field adjusters, liability adjusters, customer service personnel, and claims processors, for example. The larger the company, the more employees it must pay. On the other hand, large companies also receive more money from premiums and through investing corporate funds. This allows major insurance companies to offer discounts that small private insurers cannot provide.
In many cases, direct-sales auto insurance policies are usually less expensive than policies sold through agencies. Direct-sales insurance companies market directly to consumers and sell policies online or over the phone. Because these companies do not need to pay agents, they often have lower rates. They may also offer more discounts or promotions than other companies.
Insurance Trade-Offs
Some people believe that cheap car insurance companies have poor customer service. Although it’s certainly true that the relationship with a good agent cannot be replicated with a call center employee, not all direct-sales companies have bad customer service. Nevertheless, many companies do outsource their customer service to foreign call centers, and this is a major concern for some people.
Cheap insurance also may not provide all of the coverage that a person needs. When looking at a quote for insurance, a consumer must be careful to confirm exactly what coverage is included in the price. A quote may appear very cheap, but a policy for that price might not have the coverage that a driver needs. It may have very low limits of liability coverage, extremely high deductibles, or not include full coverage at all. Once additional coverage is added to the policy, the price is often much higher than the initial quote.
The insurance industry also has some scam-artists who prey on people looking for cheap insurance. These companies may aggressively advertise cheap insurance coverage online, but the company itself may be a scam. It may not be properly regulated or it may not even be a real company. Fortunately, a reputable insurance quote site will weed out these scam artists, which is an excellent reason to obtain your quote from a cost-comparison website.
Buying Affordable Insurance
It’s a good idea to comparison shop for auto insurance so that you can get the best deal. It’s not always a good idea to buy the cheapest policy available. Even if the company is legitimate, the coverage may be inferior or the company may have poor customer service.
The best auto insurance company is one that matches your lifestyle and needs. If you feel more comfortable having a single point of contact for insurance questions, you may want to buy insurance for an agent. If you’re politically passionate, you might wish to research a company’s philanthropic stance to see if you agree with how it uses its money. There is no single best insurance company for all people; that’s one reason why there are so many companies to choose from.
Never sacrifice the coverage you need just to save money. Although it may be tempting to save money by dropping full coverage from your car, you will wish that you’d saved the coverage if your car is ever damaged in an accident. Similarly, you’ll be grateful for the high limits of liability on your policy if you ever cause damage to another person’s property.
The best way to choose an affordable policy is to discuss your policy needs with a licensed insurance professional. He or she will be able to help you balance your needs with your budget to create a policy that will protect you without breaking the bank.
