Budget Car Insurance: A Good Idea?
Most every state has set a bare minimum of coverage that any driver must have legally. And in the wake of such well-intentioned legislative decisions, companies have sprung up to exploit it. So, like the government mandate, they offer consumers the bare minimum too. Yes, for a low price. But many consumers find that they pay the price for discount car insurance many times over, sometimes financially, and sometimes in inconvenience and hassles. Here are a few surprises that these policies often come with:
- State minimum is their minimum
Discount policies offer the basics. As Earl Scheib says, No ups, no extras. Each state has minimum coverages for legal purposes, and that is exactly what these companies offer. No more, no less. Without a doubt you'll have proof of coverage in your glove box if a cop stops you or you have an accident, but should an accident happen? Look out! You will be responsible for everything that their minimal coverage does not cover.
- We can do that - for a price
Keeping you legal is actually the tagline for one of the budget companies. And what comes with "legal" levels of liability insurance? Nothing for you, my friend. Nothing. Minimum liability insurance is covers the physical damage done to other people and to the property of others. It protects you financially up to the level of coverage you've paid for harm done to others. But what about medical coverage for your injuries? Nope. What about the harm your car suffered in the crash? Sorry. So, if you want to protect yourself against bodily injury or property damage, that's another charge. Glass replacement coverage? Car rental? Roadside assistance? Ka-ching! And if you want a level of liability coverage that will realistically protect you, a much higher premium.
- Service costs money
Know a great way for discount insurers to keep their overhead low? Fewer employees. And customer service reps living in Mumbai, India. Ever try to win an argument about what's right with someone so far removed from American concerns? Ever try to reason with the Muzak that's been playing in your ear for a half hour while you've been on hold? Unlike the major providers who compete with both price and service, heavy emphasis on services like prompt claims adjusters and prompt payouts, the discounters strive only to cut costs, and that can only mean one thing: cut-rate service.
Maybe you are among those who simply have no choice but to go with a discount provider. But if you have any option at all - eating out less, a less expensive cell plan, an apartment without a clubhouse - then by all means do it. The money you save can go toward reliable, service-oriented car insurance with coverage for you as well as others. Make the wise choice before it's too late.