When shopping for car insurance, it’s tempting to just go for the cheapest policy you can find. After all, who doesn’t want to save money? However, choosing the cheapest car insurance option can often end up costing you more in the long run.
While premiums are obviously an important factor, you also have to consider out-of-pocket expenses like deductibles and copays. A policy with a slightly higher premium but lower deductible may end up being less expensive overall if you need to file a claim.
Cheaper Policies Have Less Coverage
Insurance companies can keep premiums low by limiting the coverage options and amounts in the policy. This means you may not have adequate coverage for certain situations. For example, state minimum liability coverage limits are often too low and leave drivers underinsured.
You May Miss Out on Discounts
Insurers offer discounts for things like being a safe driver, having multiple policies with them, taking defensive driving courses, and more. Cheaper insurers may have fewer discount opportunities so the rate you see is likely the rate you get.
Weaker Financial Ratings
Insurers with lower financial strength ratings from agencies like A.M. Best are more likely to raise rates or even go out of business. This could leave you scrambling to find replacement coverage.
Customer Service May Suffer
Cheaper insurers often invest less in customer service. This could mean long wait times when you need to file a claim or have a question. Poor service when you really need help is frustrating.
Still Shop Around
Don’t just default to the most expensive company either. The key is looking for the sweet spot between price and coverage. Get quotes from insurers with strong financial ratings and reputation for quality service.
Examine Policy Limits and Deductibles
Look beyond just the premium price and understand what limits and deductibles you’re getting. Make sure they adequately fit your needs.
Consider Bundling Policies
You can often save by getting multiple policies like auto and homeowners or renters from the same insurer. But don’t sacrifice coverage to bundle.
Take Advantage of Discounts
Ask insurers what discounts they offer and how you may qualify. Things like auto-pay signup, paying annually instead of monthly, good student, and defensive driving can help lower premiums.
Think Long-Term
Consider how long you plan to be with an insurer. More expensive premiums may be worth better service over many years. Cheaper today doesn’t always mean cheaper over the long haul.
Read Reviews and Complaints
This can uncover recurrent issues with particular insurers that may influence your decision. Problems paying claims is a big red flag.
Conclusion
Cheap car insurance quotes can be tempting when you’re trying to minimize expenses. However, finding the right balance of price and coverage is important. The cheapest policy isn’t always the best choice due to less coverage, weaker financials, or poor service. Do your homework to find an affordable policy that also provides adequate protection. This can end up saving you money over the long term
