Time and again, we wonder if cheap insurance coverage is safe for us. Can you really afford to find out during the time you get into an accident that your cheaper insurance policy is, in fact, worthless?
It is understandable that people these days are looking for cheap commodities, including their insurance coverage. The recession may be over but the effects still linger. However, we would like to set the records straight that it is a baseless assumption to consider cheap insurance policies as worthless products. Here are the reasons why.
There are many possible grounds why insurance companies could offer cheaper policies. On the part of the company, it is usually viewed as a reward to the policyholders. For instance, older drivers tend to receive a huge drop in their premiums because of their reduced risks. On the other hand, drivers who have not filed any insurance claims for a couple of years will also experience the same price reduction.
Some policyholders have learned their lessons in bitter ways because they have provided inaccurate information to their insurance providers. And since underwriters would use this information to calculate the premiums, it is only but crucial to provide honest and error-free data. For example, some policyholders may claim that they park their vehicles in the streets when, in reality, it is inside a covered garage. Others mistakenly add a few mileages from their actual mileage consumption. These are just simple errors but may cause huge difference from what is supposed to be error-free insurance quotations. If you want to save money on your insurance premiums, make sure that you double-check this information before sending it to your insurance provider.
On the other hand, you also need to verify a potential company in terms of legality and reliability. There are unlicensed insurance providers who are offering policies that seem too good to be true. If it sounds like one, it is best to verify the company from your local BBB or check your local insurance office if the company is authorized to operate in your locality. Keep in mind that you need nothing less but a dependable company.
Another important factor that you have to deal with is the fine print. Some companies are known to trick their policyholders by charging extremely high costs in excess of something, or you might not be covered by certain circumstances that you otherwise were expecting. If a potential company is doing this to you, it is best to reconsider your options by requesting another quote from another insurer.
Aside from that, be aware of the type of coverage that you are trying to purchase. If you are trying to save money, you may want to steer clear from comprehensive coverage in favor of third party coverage. Then again, third party coverage is unsuitable for all types of insurance requirements. In fact, we do not want you to be in that situation where you need to sell your assets to cover insurance expenses. The third party coverage usually indemnifies the other party and leaving you with nothing else. For example, if you get into an accident where there is no party involved, the insurance company will not pay you for any medical or property damages that were incurred during the accident. In fact, you may even have to pay using your own money for your car to be towed.
Cheap car insurance is not an evil insurance policy. However, it is best to scrutinize the things that are not included in the said policy. There is no point of worrying if what you have is a cheap coverage. You can always add additional policies on top of that if you have unique requirements that are not covered yet. All you need to do is to reevaluate the nature of your work, the amount of driving you need, and other variables.
