Hidden Gotchas in Cheap Insurance

Email | Print

When it comes to insurance, price is generally the bottom line when it comes to shoppers. A few calls, some short notes, and ultimately the lowest new york car insurance quote will take the cake. Saving money is great, but there may be some serious tradeoffs when it comes to buying cheaper insurance policies. Insurance companies have a variety of sneaky and clever ways to hide, move, or obscure the cost of a policy. If you’re not careful, you could end up losing more money than you save.

The first hidden aspect of policies may not affect you at all, depending on how much you travel. Many insurance policies change coverage depending on where you are, dropping off sharply if you leave your state or country. If you frequently travel to Canada or Mexico, your insurance may stay behind when you leave. You may not realize this until you try to make a claim, which is just about the worst time to get that sort of news.

Speaking of making a claim, some companies have taken to charging insurance excesses, which are what you pay when you make a claim. A deductible is the most common example of an excess. Cheap policies often offset a low insurance premium with a really high excess. You may not pay much on a month to month basis, but should you ever try to make a claim, you’ll have to kick in a ton of money before the insurance company will step in to cover the rest.

Like banks, insurance companies also tend to offset any managerial costs associated with doing business with fees. Application fees, renewal fees, cancellation fees, you name it and an insurance company will probably put a fee on it. Companies with cheaper insurance may try to recoup that money with much higher fees, which might end up biting your wallet more than you expect.

Additionally, comprehensive coverage may not necessarily be comprehensive. While this insurance will cover property damage on your car, some of the extras like car rentals, windshield coverage, and coverage while driving other cars may have been yanked out to get the sticker price down. It’s possible you’re not interested in these features, but don’t assume they’ll be included – especially if the price is lower than you expect.

Related Posts

Ask This Expert a Question or Leave a Comment