Why Buying The Lowest-Priced Car Insurance May Be A Bad Choice?
Updated On Oct 16, 2023
Read to know some of the reasons why you should not purchase the lowest-priced car insurance for your car.
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- Reasons To Avoid Buying The Lowest-Priced Car Insurance
Since it is mandatory to own car insurance, many people try to buy it spending the lowest possible amount to just adhere to the law. Also, a lot of individuals tends to opt for the most economical policy to save their hard-earned money. Definitely buying an affordable policy may reduce the cost of your car insurance but can turn out to be more expensive in the long term. It is probable to happen as different car insurance plans come with different coverage, features, or benefits, so a lower-priced cover can strip some of your essential benefits.
Reasons To Avoid Buying The Lowest-Priced Car Insurance
Let’s discuss some reasons why you should avoid buying the lowest-priced car insurance for your car:
1. Lower-Priced Car Insurance Affects Plan Coverage
When you purchase car insurance, its coverage depends on its cost. The features, benefits and coverage level impact the policy price. Generally, a lower policy premium refers to lower policy coverage and high coverage comes with a high-cost policy. An economical policy may provide you with basic coverage like third party cover while to get all-around protection you will have to buy a comprehensive policy that is available at a higher premium amount. Hence, you should try to opt for an adequate policy as per your requirements rather than going for the lowest-priced policy only.
2. Affordable Car Insurance May Not Give Essential Benefits
A car insurance plan comes with a combination of coverage and benefits. The insurance companies offering plans at a lower premium generally reduce the policy coverage benefits. Now, you should understand that purchasing an affordable plan by curbing crucial benefits is not a good thing. If a comprehensive insurance policy is available at an affordable price without shredding any benefit, then it is good to go plan, while a plan available at the lowest-priced car insurance plan that does not cover you for an accident, could result in major financial losses for you later. Hence, it is crucial to compare plans and pick a plan offering essential benefits even if it is available at a little higher premium.
You may also like to read: No Claim Bonus in Car Insurance: Know More?
3. Lowest-Priced Plans May Lead To Higher Deductibles
A major drawback of purchasing the lowest-priced policy is that it could come with a high amount of deductibles. A deductible is an amount that policyholders have to pay during the claim settlement. You will have to pay your deductible first and then your insurer will give you the claim amount. If you are finding an economical insurance plan with a higher deductible, it means you will have to pay less now but will have to pay a lot more during the time of claim settlement. So, you should opt for a deductible amount that you can afford to pay during claim settlement and you cannot, it is better to purchase a higher-priced comprehensive plan that comes with lower deductibles.
4. Economical Car Insurance May Not Offer Cashless Claims
The cashless claim is one of the best features that an insurance company offers. The facility allows the policyholders to get their cars repaired at a network garage of the insurance company. Under this claim type, you can get your car repaired by taking it to a network garage where the repair bill will be settled by your insurance company. When it comes to purchasing an economical car insurance plan, you may not get this facility and you may have to pay for your repair cost from your pocket and reimburse it later. So, while picking a lower-priced plan, confirm if it is offering the cashless claim facility or not.
5. Lower-Priced Car Insurance May Give Poor Customer Service
When it comes to an expensive car insurance plan, it might give you the widest coverage, numerous benefits, and efficient customer support, while could be absent in a lower-priced car insurance policy in addition to lower coverage and fewer benefits. The insurance company offering policies at lower prices may not be able to deliver an active customer support system and also may have a low claim settlement ratio by taking time to settle claims. Therefore, you should check the available customer support provided by the insurance company before purchasing a low-priced car insurance policy. If an insurance company is known for poor customer service, then you should buy a higher-priced insurance policy.
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.