Is It Smart to Buy Cheaper Car Insurance?
Cheap car insurance might be great for your wallet today – but it can backfire in the long-run. There are plenty of downsides to getting inexpensive car insurance. Some people are willing to pay more for extensive coverage while others think they're safe drivers, so they get minimum coverage.
At Service King Ingram in San Antonio, TX we know that many people are confused about how to get the right insurance coverage for you, so here is a blog about the topic.
The Benefits of Inexpensive Car Insurance
The good news is this--not all inexpensive car insurance is necessarily cheap. If your funds are low, then less expensive car insurance might be the best option until you’re in a better financial position.
The primary benefits of inexpensive car insurance include:
· You keep more money in your bank account
· You can pay for only the coverage you want or require
· You can invest all of the money you save by purchasing lower-priced insurance and then use that money if and when you ever get into a collision that exceeds your policy's limits
Why Buying Cheaper Insurance is Not a Great Idea
Let’s look at the disadvantages of cheaper car insurance:
Generally speaking, drivers with inexpensive car insurance are going to face difficulty when they need to make a claim. Cheaper car insurance is for people who believe that they are safe drivers and/or have the records to prove it.
Is cheap car insurance truly worth the added risk? Is it worth it to assume the risk just to save a few hundred dollars annually? You might want to save money immediately only to lose big down the road.
Even Small Fender Benders Can Exceed Your Insurance Coverage
Low-cost basic liability car insurance plans come with lower coverage limits. Most experts suggest that you should have a minimum of $500,000 of liability coverage per collision, while others recommend $1 million or even $2 million for maximum protection. However, cheaper car insurance policies may offer just $10,000 or $30,000 of coverage per accident.
It doesn’t take that much damage to exceed a $10,000 car insurance policy. Even a minor hit can exceed that limit, especially if you have multiple passengers in the vehicle that might require costly medical treatment.
Liability Insurance Can Leave You Without Transportation
An inexpensive car insurance policy only provides you with liability coverage. That means your policy will normally cover damages you inflict on other drivers, property, animals, passengers and other vehicles. But unfortunately, it will not cover the costs of repairing or replacing your own car.
That's why you should always ask yourself if you can afford to repair your vehicle out of pocket? Do you have enough funds to replace your car if it’s totaled in an accident? Can you go without a car for several weeks while your vehicle is being fixed? These are all questions you need to answer if you want to purchase cheap car insurance.
You May Have to Live with a Higher Deductible
One of the ideal ways to get cheap car insurance is to raise your deductible. A standard car insurance deductible is approximately $500, but you can always hike it up to $1,000 or higher in order to lower your premiums, which means that you will pay more when you make a claim, but spend less monthly.
Think Very Carefully Before Buying Cheaper Car Insurance
Cheap car insurance can look like a great deal, but it can also be your worst nightmare if you need to make a claim. In a minor collision, you’ll need to pony up for repairs or a new vehicle out your own pocket. So, always do your due diligence and think twice before acquiring low-cost car insurance.
Service King Ingram, 7602 Ingram Rd, San Antonio, TX 78251
Sources: USA Today and consumersadvocate.com
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