It’s a common misconception that the only way to get affordable car insurance is to sacrifice coverage. In reality, there are plenty of ways to get cheap car insurance without skimping on protection.
However, if you’re not careful, these strategies can backfire and cost you more in the long run. To help guide you in your cheap car insurance search, here are ten reasons why cheap car insurance can cost you.
1. Low Coverage Limits
One of the most common ways to keep car insurance premiums low is to opt for low coverage limits. While this can lower your monthly payments, it also increases the amount you’ll be responsible for if you get into an accident or suffer a loss. You could face thousands of dollars in out-of-pocket costs if you’re found at fault and your coverage limits are too low.
2. Limited Benefits
Many cheap car insurance policies have limited benefits, such as no roadside assistance or rental car reimbursement. This can be especially problematic in case of an accident since you won’t have the added protection to cover any additional costs related to repairs or replacement vehicles.
3. Poor Financial Stability
Affordable car insurance companies may initially offer low rates but may not have enough financial security to pay a claim if needed. If they don’t have the capital necessary to pay, you could end up footing the bill for any damages even after purchasing insurance coverage.
4. Inadequate Claims Service
Some insurance companies may offer cheap rates, but they could have less-than-stellar customer service. Unfortunately, this means that when you file a claim, you might not get the prompt and efficient assistance you need during such an unfortunate time.
5. Higher Deductibles
Opting for higher deductibles is another way to keep your car insurance costs low, but this comes with risks. If you’re in an accident and have to pay out of pocket for repairs or replacement vehicles, those high deductibles could cost you more than expected.
6. Poor Reputation
Cheap car insurance companies may also have a poor track record with customer satisfaction—which can be problematic if something goes wrong after getting coverage.
7. Unfair Reimbursement
Sometimes, an insurance company may not honor a claim due to fine language in the policy or other loopholes that you weren’t aware of when making the purchase. This could leave you with a coverage gap, leaving you responsible for any damages or repairs.
8. Limited Discounts
Some cheap car insurance companies offer few discounts and rewards programs for drivers, meaning you might not get the best possible deal on your premiums even if you have good driving habits.
9. High Fees & Penalties
Cheap car insurance companies may also charge higher fees and penalties than other providers — especially with regard to late payments or canceling policies early. These additional costs can add up quickly and cost you more than expected.
10. Legal Issues
Finally, cheap car insurance companies may not have the resources to handle any legal issues arising from an accident or claim. This means you’ll have to pay for a lawyer out of pocket if there’s a dispute over who is financially responsible for damages related to an accident.
Avoid the Pitfalls of Cheap Insurance
Of course, saving money is a great thing — but sometimes trying to save money in the short term can ultimately cost you more in the long run. For instance, as you can see, opting for inexpensive car insurance might not be as cost-effective as you think it is in the long run.
Therefore, be sure to do your research before making any decisions to get the best possible deal without sacrificing protection.