There is a reason why the cheapest car insurance may not be the best? Figure out why getting the cheapest car insurance may not be the ideal solution for you.
People look at various ways to save their hard-earned money. Opting for products with cheapest prices is one of the most common ways to preserve money. However, experts feel that this might not be a wise move most times.
For example, it would be easy to choose car insurance just because it is the cheapest among the lot. But, things are not always in black and white. Although the cheapest car insurance could save you money in the short-term, you might end up paying far more in the long-term.
Let’s see why the cheapest car insurance may not be the best option and why price shouldn’t be the only deciding factor.
Although high prices are not a definitive indicator of better quality, usually, the opposite is true. Cheap prices generally mean fewer benefits. Especially with insurance, the adage that ‘you get what you pay for’ is correct. In car insurance schemes, the cheapest policy could mean lower coverage and benefits. The low price of the policy might be at the cost of critical coverage. It would be a rude shock to know that the cheapest policy does not offer a cover for an accident after it has happened.
Hence, you should make sure that the low price does not come at the cost of the benefits. The whole point of insurance is to help you tide over emergencies. If the cheapest car insurance does not offer you ample coverage, better choose some other plan that does. A cost-benefit analysis will tell you why the cheapest insurance may not be the best for you.
It is quite possible that the insurance premium is lower because the deductible is high. It means that when you make a claim for repairs, you will have to shell out a large amount of money in the first place. The insurer will pay his share only after that. It could be a case of paying less now and dishing out more money later. So, before you go for the cheapest insurance, check out whether it is beneficial in the end.
The cheapest car insurance might be offering you only the very basic cover. In most cases, these cheap insurance cover offers cover only the mandatory requirements. For example, third party liability is compulsory in India and many policies might offer only this minimum coverage. However, it might be prudent to opt for a comprehensive coverage, even if it costs more.
It is important to understand that there is a huge difference in meeting the basic legal necessities and getting the best coverage. Just because the law doesn’t require you to have a particular coverage, you should not opt out of it. Don’t end up as a loser because you were penny wise and pound foolish.
The Level of Coverage
In continuance with the above point, it is always better to boost the level of coverage. Insurance is your cushion against risk. The more cushioned you are, the safer you would be. A cheaper policy is cheap because it offers only basic cover. It could prove counterproductive in the event of a claim arising out of accident or damage. Ideally, the insurance cover should offer you protection against all damages. Cheapest car insurance would definitely fall short of your expectations in such cases.
Suppose your car met with an accident and you have cashless claim cover. In that case, you can avail the cashless facility and get your car repaired through the insurance company’s network garage. The advantage is that you don’t have to pay money out of your pocket.
However, if you get the repairs done from a garage outside the network, you will have to pay from your pocket and claim a reimbursement. It is better to opt for roadside assistance cover and cashless claim cover. If so, in the unfortunate event of an accident, the insurer will arrange for the vehicle to be moved to the network garage and get the repairs done.
In short, make a decision based on features like cashless claims, roadside assistance, vehicle replacement cover, and personal accident cover rather than simply opting for the cheapest car insurance.