Are you looking for cheap car insurance? Most of us want to get the best possible rate, but is it worth sacrificing quality and service when shopping for cheaper rates?
In this article we give our insights on how to find competitive auto insurance premiums without compromising on the coverage you need. With a few simple tips and tricks however, it’s is possible to secure an affordable policy from a reliable provider who can meet your needs while staying within your budget.
Read on to understand more about car insurance costs, what affects them, and how best to go about finding value-for-money protection between potential providers.
What You Need to Know About Cheap Car Insurance
We understand the importance of finding an insurance policy that fits your budget. Cheap car insurance policies may seem appealing, but it’s important to do your research before selecting a plan. One thing to keep in mind is that the cheapest option may not always provide the coverage you need in case of an accident.
It’s worth taking the time to compare different policies and understand what they offer. Additionally, check the reputation of the insurance company before signing up for coverage. While it’s tempting to select the cheapest option, it’s important to remember that quality coverage may ultimately save you more money in the long run. We have a saying around here, “Cheap insurance is expensive”.
Pros and Cons of Cheap Car Insurance
We understand that cheap car insurance may be tempting since it can save you money upfront. However, it also has its own set of pros and cons. The main benefit is obviously the cost savings, which can give you peace of mind knowing that you’re not overspending on insurance.
On the downside, less expensive policies may have higher deductibles, fewer coverage options, features, and generally less personalized service. Here are some things to consider:
Service: Will you have your own agent or do you have to call a 1-800 number if you have a question?
Higher Deductibles: Do you have an emergency fund to cover your deductible should you have a claim? If not, you’re likely going to put yourself into a financial bind.
Coverage Options: Let’s say you chose that higher $1,500 deductible and your windshield gets cracked. With Glass Coverage you can get your windshield replaced for free with no Comprehensive claim on your record. If you’re with a cheap car insurance company that doesn’t offer Glass Coverage, you’ll have to pay your $1,500 deductible and it will be logged as a Comprehensive claim which could cause your rates to increase at renewal.
Accident Forgiveness: This one could pay off huge, especially if you have youthful drivers. Even one accident can raise your rates for the next 5 years. This coverage option could end up saving you thousands. It’s highly unlikely the cheapest policies are going to have this feature.
Telematics: This is where you allow the insurance company to track your driving for a period of time. Typically, this is done with a phone app but some companies still use a plug in device for the car.
In return for allowing them to track this data, if you’re a good driver, you could earn a discount of up to 40%. Some companies even protect the downside and will not charge you more if you drove poorly.
Exclusions are another potential downfall of cheap car insurance policies. You may have limited coverage if you’re driving a rental car.
For example, if you’re in an accident in a rental car your policy will likely cover the damage to the car. However, a cheap policy may exclude Loss of Use. This is the money the rental car company loses every day their car is in the shop and they can’t rent it out. Many times they have in their rental contract that they’re allowed to charge you 2 or 3 times the daily rental fee. If they rent the car for $50/day and it’s out for 30 days you could be on the hook for as much as $4,500!
3 Ways to Purchase Car Insurance
There are three main channels to purchase car insurance:
- Captive Insurance Agent – This is an insurance agent that works for an insurance company like State Farm, Allstate, Farmers or American Family. These are long standing companies with great financial backing. However, understand that it is the agents job to sell you insurance from their company no matter what. They’re not going to compare options to find what fits you best.
- Direct to Consumer – These companies utilize call centers and spend a ton of money advertising to get brand recognition. GEICO and Progressive are a couple examples. Customer service and knowledge can be lacking.
- Independent Agent – By far the best way to purchase insurance and, yes, we’re bias! Independent agents represent many insurance companies and are not employees of these companies. Want to truly compare options and have the personalized service of an agent? This is the way to go.
How to Get a Competitive Rate for Your Car Insurance
Bundle your car insurance policy with other policies, such as homeowners, renters, Umbrella or Motorcycle Insurance. Bundling your homeowners will result in the largest discount, averaging about 18%.
Choose a higher deductible, which may lower your monthly premium but also means you’ll have to pay more out of pocket in the event of an accident. As we previously mentioned, only choose a deductible that is equal to or less than your emergency fund.
Improve your credit score. You can use any number of apps like Credit Karma to track your progress. Your credit score has a significant impact on your car insurance rates.
Work with an agent you trust. If you only entered your name and address to get a quote chances are discounts are missing. The only way to properly assemble a policy is by having an agent take the time to ask questions and get familiar with your specific needs. Car insurance policies are more customizable and complex than they have ever been so don’t get caught up in the, “Get a quote in 60 seconds” marketing.
Tips to Make Sure You’re Getting Quality Service Even at a Low Cost
Quality service shouldn’t be sacrificed to save a few bucks. To ensure that you are getting quality service even at a low cost, we’re giving you some insider tips.
Ask if the insurance agency has an app. This can allow you to retrieve documents like ID cards 24/7 without having to jump through hoops.
Ask if their website has a service portal where you can quickly ask a question or request a change to your policy instead of waiting on hold for 20 minutes.
Ask if the agency performs annual reviews. Your life and property changes and your insurance needs to do the same. An annual review can make sure you don’t miss a discount or have added jewelry, finished a basement, installed a deck, new household driver, or improved credit score. They should also ask for you to rate them and tell them what they can be doing better.
Check out their Google Reviews. See what others have to say about their experience.
Finding the Right Balance Between Savings and Quality Coverage
While it can be tempting to go for the cheapest option, it may not provide adequate protection in the event of an accident or unforeseen circumstance.
However, if you have a good relationship with an agent you trust, it is possible to have competitively priced (we don’t like the word “cheap”) car insurance while at the same time getting great coverage.
Rates will always fluctuate. The cost of parts and labor go up, inflation plays a role and natural disasters happen. Have a good relationship with your agent and work with them to explore all your options.
Free Policy Review
If you’re just not sure about all the legal jargon in your policy, use our Policy Review Tool and we’ll show you exactly what changes we recommend you make. This will upload your existing policy for our expert agents to review.
Of course, we’d love to earn your business, but first we’d like to show our value as independent agents.