If you are considering using an insurance company that promises it is cheaper than its competitors, you may end up paying a lot more in the long run. You might think everything is fine, but if the time comes where you find you need help from your insurance, you may discover that there is no help to be found.
Dirt cheap insurance companies sound too good to be true because they are. They have to make a profit somewhere, and you may learn how they do it the hard way after you are injured, and they won’t pay your claim.
When shopping around for insurance, you may get excited by finding a quote that is far lower than what you have seen offered by other agencies. However, it is critical that you read the fine print before purchasing any auto insurance, especially a policy whose price seems too good to be true. Often, a very cheap policy has significant disadvantages, as these tactics demonstrate.
Coverage Is Not Enough for a Serious Accident
When a company offers you a policy at a very low rate, it often means that the policy will not cover a serious accident with multiple injuries. Experts recommend that you have a policy with at least a $500,000 liability limit per accident and a $2 million overall limit.
Cheap insurance policies often only cover the minimum required under the law, which may be as low as $10,000 in some states. When carrying a policy with this type of coverage, you will be personally responsible for paying any claims above the liability limit should you be involved in an accident.
Liability Only
Many cheap insurance policies are for liability only, which means that damage to your own vehicle will not be covered in the event of an accident. If you have a loan on your car, the bank more than likely requires you to have coverage on your vehicle. If you do not carry coverage, they will put a policy in place that is much more costly than what you could purchase on your own.
If you own your car outright, you will find that most states only require you to carry liability coverage. Should you choose to go with this option, if you get in an accident where you are at fault, your insurance will pay for repairs on the other party’s vehicle. However, you will be on the hook for your own vehicle’s repair costs.
Slow Claim Payment
A company that offers a cheap insurance policy may also be slow to pay claims, even if you have enough coverage. Keep in mind that getting car accident compensation fast means a lot when bills are piling up, and you cannot work.
A company that sells cheap insurance may keep coming up with excuses why your claim has not been paid. They may demand a significant amount of paperwork before they will issue payment. They could also require you to visit their own repair shop, which may be one that does substandard work.
Bad Customer Service
There have been reports from customers who only had liability coverage that the insurance company provided them with worse customer service than those who had full coverage. When you need to work with an insurance company after an accident, you want one that offers outstanding customer service. The type of policy you have should not have any bearing on the customer service you receive.
High Deductibles
Another common method insurance companies use to keep costs down is to offer policies with high deductibles. Your monthly premium may be lower, but what you will have to pay out of pocket after an accident could be significant.
When you choose an insurance policy, be sure that the deductible is an amount you can easily pay should your car need to be repaired. A deductible between $500 and $1,000 is the most common.
The insurance industry may make claims that they are in the business of helping people, but that is simply not true. Any help that insurance companies give to the people they cover with their policies is merely a side effect of their business and one that they would usually prefer to avoid.
That is because helping people means paying out claims. Insurance companies hate paying out claims. The ideal world for an insurance company would be one in which no injuries or accidents ever occur, but people buy insurance anyway. The insurance industry is not in the business of helping people. They are in the business of making money.
Insurance companies will fight tooth and nail to avoid paying a claim whenever possible. When it cannot be avoided they will do their best to undervalue the claim, so that it costs them as little as possible. That is why, when an insurance company offers rates that seem too good to be true, you can safely assume that you will never see a penny from them if you get into a situation where you really need their help.
Going with a cut-rate insurance plan can save you money in the short term. However, you are essentially taking the same risk as going without insurance at all. When an accident happens, you will find that the cost to you is basically the same with one of these policies as it would be if you carried no coverage.
Bring in an Attorney
When involved in a car accident, whether you carry a cheap insurance policy or an expensive one, the assistance of an experienced car accident lawyer can make all the difference. Car insurance lawyers know all of the tricks used by the insurance companies to avoid paying claims or undervalue the claims they must pay.
Before speaking with an insurance company after an accident, consult with a lawyer. You have enough to worry about with getting your vehicle repaired and recovering from any injuries. Let a qualified attorney deal with the insurance companies and the financial side of things.
