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5 Reasons Why Buying The Lowest-Priced Car Insurance May Not Be A Good Idea

Published On Jul 22, 2021 11:00 AM By InsuranceDekho

Read this article to find out the top 5 reasons why buying a low-priced car insurance policy may not be ideal.

Saving money is something that everyone works hard for. To save money, most of us choose to buy goods at a fair price rather than the most costly option. This concept, however, does not apply to a vehicle insurance policy. It is not a good idea, according to vehicle insurance experts, to choose the cheapest auto insurance coverage available. This is owing to the fact that not all vehicle insurance policies provide the same level of coverage or incentives, and you may be denied certain essential benefits as a result of a lower-priced car insurance policy. 

5 Reasons Why Buying The Lowest-Priced Car Insurance May Not Be A Good Idea

Reasons Why Purchasing Low Priced Car Insurance Policy Is Not A Good Idea

While all of us would prefer to purchase policies under our budget, it is very important to look for adequate coverage too. This is mainly because low-priced policies tend to have minimal coverage that can leave you unprotected in case of any misfortune event. The following are the reasons why you should not pick extremely low priced car insurance policies -

  • Has An Impact On Policy Coverage

The cost of a car insurance premium is largely determined by the policy's coverage. Lower car insurance costs are usually associated with less coverage. An economical car insurance policy is only affordable because it includes basic coverage, such as third-party car insurance. Because third-party insurance only covers third-party risks, if an accident causes loss or damage to your car, you might face significant financial losses. Only a comprehensive car insurance policy with a higher cost will provide you with full coverage for your car.

  • May Not Provide Essential Benefits

A car insurance policy combines coverage and essential benefits. Cheaper car insurance policies provide fewer benefits. Car insurance premiums are reduced by insurers by reducing coverage benefits. Even a minor accident that is not covered by the cheapest insurance might result in significant financial losses.

  • Larger Deductibles

Another disadvantage of buying the cheapest car insurance premium is that it comes with higher deductibles. A deductible is a proportion of the claim amount paid by the policyholder during claim settlement. You must first pay the deductible amount, and then the car insurance company will contribute to the cost of the claim. The lower the premium rate, the smaller the insurer's liability on the claim amount.

  • It May Not Provide Cashless Claims

One of the finest features of the car insurance business is that it allows for cashless claims. Car insurance policies with cashless claims allow the car owner to have their car fixed at a garage in the insurer's network. You do not need to spend any money to fix the car because the expense is covered by the insurance provider. It saves you money from having to pay for it out of your own pocket.

  • Unsatisfactory Customer Service 

A more expensive car insurance policy comes with more complete coverage, more benefits, and more effective customer service. A lower-cost car insurance plan, on the other hand, offers just minimal coverage, poor customer support, and fewer perks.

What You Should Look For While Purchasing Car Insurance

When you are purchasing a car insurance policy, it is very important to check aspects like the coverage provided, the different additional covers that are available along the cashless facility offered by the insurance company. You should also look for a seamless claim settlement and insurance renewal process as these are the exact reasons why you purchase car insurance. Make sure to validate your car insurance policy on multiple parameters before you purchase it. 

Take Away

Low-cost car insurance usually means less coverage, fewer perks, higher deductibles, and bad customer service. As a result, instead of looking for the cheapest car insurance policy, seek a comprehensive car insurance policy that provides complete coverage. Therefore,  purchasing a low-car car insurance coverage is not always in your best interests.

Also Read: 

How to Cancel A Car Insurance Policy and Receive A Refund?

What is Key Replacement Cover in Car Insurance?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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