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Cheap car insurance can seem like an attractive option, especially for those on a budget. However, while it might be tempting to opt for the lowest-cost option, cheap car insurance can also come with many risks and drawbacks.
To help guide you in your insurance purchasing journey, here are some of the dangers associated with selecting a cheap car insurance policy.
Why Would Someone Buy Cheap Car Insurance?
A cheap car insurance policy’s biggest attraction is the lower price. For many drivers, there are financial constraints that motivate them to choose the cheapest option available. However, buying a cheap car insurance policy also has certain risks and drawbacks, which we will review.
Risks of Cheap Car Insurance
There are several risks associated with choosing a cheap car insurance policy. The key hazards of purchasing a cheap car insurance policy include the following:
1. Poor Coverage
Cheap car insurance policies often have less coverage than more expensive ones, leaving you vulnerable to financial losses in the event of an accident or other damage.
2. Low Quality
Cheap car insurance plans may be of lower quality than those offered by more expensive companies, and they may provide a different level of customer service than higher-priced options. As a result, it can be difficult to resolve any claims or disputes that arise.
3. Limited Availability
Cheap car insurance may only be available in some states, or the policies may exclude certain types of vehicles. This can leave you with limited options and make it difficult to find a policy that meets your needs.
4. High Deductibles
In many cases, cheap car insurance policies have high deductibles that you must pay out of pocket before the insurer will pay for any damage or repairs. This can leave you with hefty out-of-pocket costs in the event of an accident.
5. Poor Customer Service
As mentioned above, cheap car insurance plans often have poor customer service. This can make it difficult to get help or even file a claim when you need it.
6. Fraudulent Companies
Unfortunately, some companies offer cheap car insurance that is not legitimate. In addition, these companies may not be insured or have sufficient coverage for you in the event of an accident.
7. No Roadside Assistance
Cheap car insurance policies may not include roadside assistance or other services like towing and minor repairs. This can leave you with hefty bills in the event of a breakdown or other issues.
8. Lack of Coverage for Damage or Theft
Many cheap car insurance plans lack coverage for theft or damage to your vehicle. This can leave you with costly repairs and replacements if your car is stolen or damaged.
How to Avoid the Risks of Cheap Car Insurance
Although cheap car insurance may seem appealing, it can come with several risks. To stay safe and avoid potential problems, you should do your research before selecting a policy. Make sure to compare different policies and read reviews of the companies offering the policies.
Additionally, you should always make sure the policy provides adequate coverage and includes roadside assistance. By taking these precautions, you can ensure that you select a car insurance policy that meets your needs and won’t leave you with any nasty surprises.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.