After the succession of financial crises marked by the recent global recession, a lot of individuals tend to constraint their budget to fit their needs. Basic needs are the priorities of individuals in budgeting, other expenses even though important are set aside to give way to the satisfaction of these needs. One of those important expenses that are usually set aside is car indemnity. Recent statistics shows that the maintenance of finds like indemnity and savings accounts dramatically decreased after the recent recession. This means that a lot of drivers are now driving uninsured and unprotected from possible accidents and road mishaps.
Policy holders either close their indemnity accounts or shift to lower premium insurance policies to be able to make their expenses fit their budget. Those who have given up on paying their premiums are left with no other choice but to solely bear the risks of driving. On the other hand, those who have shifted to indemnity policies with lower interest rates increase the risks of having insufficient compensation and support during car related incidents. Low cost car insurance is a dream for many policy holders, but the consequences of getting one can put policy holders in very compromising situations.
Premium rate is the computation of car insurance companies regarding the risks they are taking in behalf of their policy holders. Higher premium rates can be translated to more comprehensive coverage. Policy holders who pay higher premium rates are most likely more privileged in terms of coverage and assistance.
Comprehensive car indemnity policies usually have high premium rates since they cover almost every car related aspect of the policy holder’s life. This type of indemnity covers everything from accidents, even up to theft and natural disasters. On the other hand, third party indemnity is the cheapest car insurance available in the market today. This indemnity policy only compensates if the policy holder is involved in an accident, other possible causes of car related financial losses are not taken into consideration.
Taking a closer look in the two situations presented, policy holders should be able to see the importance of getting an indemnity policy with more coverage. It is inevitable that budget constraints can make policy holders go for cheap insurance even if it has fewer benefits. If they can pay for something better, policy holders should grab the opportunities of getting better policies with better coverage. There is nothing wrong with low cost car insurance, but there is something wrong in putting lives at great risks just for the sake of saving a few bucks.