According to US law, all drivers are obligated to have auto liability insurance. Even though this is the word of law, we can see that a high percentage of drivers don’t have the necessary insurance. As you can presume, there are some serious penalties for those who don’t abide the law. However, it should be said that this doesn’t bother drivers too much.
A lot of them simply don’t have the necessary papers, after all. This is pretty much the only conclusion we can have about it. At the same time, we can see that the costs of auto liability insurance can be pretty high in some cases. So, it’s no wonder so many people don’t have it. At the same time, we can see that there are a lot of drivers who have opted for obtaining the cheapest auto insurance they could find in their states.
For those who don’t know, this means that they have minimum coverage. We can see that the insurance costs are widely different from vehicle to vehicle. For example, click here, and you can see what are the costs of insuring Honda Civic. Nowadays, there is a trend of companies that market themselves as state minimum or low-cost insurance companies.
So, many people wonder if it is the right way to insure yourself. There are advocates for both actions. Now, let’s talk about why you shouldn’t buy the cheapest auto insurance.
1. There are Fees
Obtaining the cheapest insurance possible can be a good solution for people whose policies don’t last too long, due to the heftiness. Furthermore, the companies who offer this kind of service market themselves pretty well, in terms of what kind of service they will provide to their customers. There is a wide array of these features they offer you with, for a small amount of money.
But it should be said that these features don’t have almost any influence on the decision of why their customers choose them. The only and ultimate reason is cheapness. Many people don’t know that a vast majority of these companies have fees their customers are obligated to pay. Ultimately, this leads to a much higher price of the insurance than the one that was presented to the customers.
2. High Deductibility
It goes without saying that you will be able to receive some pretty low rates when you choose a company that will offer you cheap auto insurance. However, what you don’t know is that their insurances are, most often, highly deductible. Sure, you have a vehicle, and when you are in an accident where your car or truck will experience some high damage, you can expect the coverage.
Well, yes. But you don’t know that you will need to have between $2,000 and $4,000 to start the repairs on your vehicle. The reason is that the policy you have signed has a high deductible. Therefore, you need to be careful about what you’ve agreed on. When you get the contract, be sure that you’ve learned all of it, and know what it all means. That way you will know what to expect in the future.
3. They can Argue About the Costs
In case you’ve opted for cheap auto insurance, it could happen that the company will argue with you about the value of your vehicle. Yes, they’ve agreed to replace your vehicle or fix the damage it suffered, but that doesn’t mean that they are willing to go all the way. Problems can arise from this fact, and basically, most of the drivers are not aware of this fact.
This means that the policy can even consist of a clause that can that you can replace your vehicle only with the other one that is of similar value. While there is nothing wrong with that in theory, it should be said that they can use it to their benefit. For example, if you have some devices in your vehicle that you’ve invested in, they will completely ignore this fact and they will measure the value of the vehicle solely on the fabric specification of the vehicle in question.
4. The Driver is Important?
If you are not too possessive about your vehicle, and you don’t let pretty much anyone else to drive them, you don’t have any problems. However, chances are that you are not that person and that you are willing to let some of your friends or family drive sometimes. The problem with the insurance company can arise when someone else has an accident while driving your car.
Some of the companies that market themselves as cheap when it comes to the insurance policy will include a clause in a contract that says that you can get coverage only in case when the owner is driving. You will admit that doesn’t have a lot of sense since the vehicle is insured, not a person. But there are companies who are more than willing to do that and use it to their benefits. So, make sure that you’ve studied all the elements of the contract before you decide to sign it.
5. Be Careful of Scams
There is absolutely no doubt that there are many insurance companies that are out there to scam people. There are no reasons why it should be any different from auto insurance companies, right? Sadly, many people become victims of this kind of companies when they are in a hurry to obtain some cheap auto insurance. There is a lot of different examples of this happening in the US.
So, you need to find all the crucial information about a particular insurance company before you step into their office. Only by doing that you will be able to protect yourself from these scams. We know that it is pretty hard for people to do that when they don’t have a lot of options in front of them. But, it’s always better to prevent the problem from happening than solving all the negative effects that have arisen as a result of that decision. Simply said, be careful.