The True Cost of “Cheap” Car Insurance

Written by on 7/14/2016 5:10 AM . It has 3 Comments.

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No one wants to pay too much for anything, especially not your car insurance. But we’ve all heard the old adage, “You get what you pay for.” Going with the cheapest car insurance or cutting your coverage to save money might make sense right now, but all it takes is one accident to ruin all those savings.

Take a look at the true costs of cheap car insurance so you understand what you’re getting yourself into.

Low Coverage Limits

Every state has a minimum amount of insurance you’re required to purchase. In North Carolina, it’s $30,000 for bodily injury, $60,000 for all bodily injuries in an accident, and $25,000 for property damage. When people start looking for cheap car insurance, this is where they start. Cutting your coverage amounts to the bare minimum is a recipe for disaster, though.

Imagine an accident where you rear-end another vehicle, injuring the driver and two passengers. Your vehicle is totaled, as is their vehicle. Everyone is sent to the emergency room to assess their injuries. Can you hear the ka-ching of the cash register in your mind? The costs are racking up and it was a fairly common accident. Once the limits of your insurance have been met, any additional cost will be on you.

Few Features

When you choose the cheapest insurance company or cut your coverage to the bare minimum, you sacrifice a lot of features. Roadside assistance and towing after an accident are just two. Those things may seem small until you’re stuck on the side of the road because a raccoon ran out in front of you.

Poor Customer Service

Sometimes the insurance is "cheap" because companies cut their overhead - the people who work for them. That might not matter much to you until you need to file a claim for an accident. Be prepared for a lower level of service from an overworked staff, slower claims resolution, and little help. The hold time to talk to someone may not be worth the “savings” you’ll see with your cheap insurance.

Deductibles You Can’t Afford

One common trick to lower your Charlotte auto insurance costs is to agree to pay a higher deductible. There’s nothing wrong with this tactic as long as you can afford the deductible when you need it. The lower premiums associated with a $1,000 deductible do you no good if you can’t afford to pay it when you have to make a claim.

Dropping Underinsured and Uninsured Motorist Coverage

Another way to make sure your auto insurance is as cheap as possible is drop the underinsured and uninsured motorist coverage. Your might think that is a good idea. After all, if everyone is required by law to have insurance, this shouldn’t be needed. Think again. Unfortunately, not everyone follows the law, and if an uninsured driver hits you, you’ll be the one paying for the cost of an accident you didn’t even cause.

Trying to save money on your auto insurance makes complete sense, but going for the cheapest policy could easily cost you when you need it most.

If you’re in the market for a new policy, or you just want to save money on your insurance, contact us at Charlotte Insurance. We’ll get to know you and find the most cost effective solution for you while still protecting you and your vehicle.


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