Should I choose the lowest quote for car insurance?
The lowest quote for car insurance isn't always the best option for coverage. Beware of misleading quotes, insufficient coverage, and evaluate every quote before choosing the lowest quote for car insurance.
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UPDATED: May 26, 2021
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- It may be tempting to go with the lowest quote you can find, but take the time to investigate your potential insurance carrier
- Choose sufficient coverage for yourself and your family, even when it costs more
- Be wary of plans with a higher-than-normal deductible
When searching for affordable car insurance coverage online, you will be asked to enter some basic information on the website, including the make and model of your car along with your state of residence.
These basic pieces of data are used to request quotes from car insurance companies that underwrite policies in each state.
You may be tempted to pursue the lowest quoted annual premium, but there are some definite reasons to avoid this mistake. Wise shoppers know that multiple rounds of direct contact with the insurer will be essential to building the right policy and finding affordable annual premiums.
Insurance companies will not underwrite a policy based on the basic information entered on a website. This is typically not how car insurance premiums are calculated.
The wise shopper will set aside extremely low rates that are not in the ballpark with most of the other quotes.
Careful examination will reveal one or more of the following facts about the low rate.
- Introductory rate – A six-month introductory annual premium is appealing to insurance shoppers in tight financial situations. Once the introductory period expires, however, the insurance rate will return to the market levels. Occasionally the next six-month period is even higher than the market rate to compensate.
- Unfamiliar insurer – Famous car insurance companies have healthy advertising budgets that enable them to present their products to the public on a frequent basis, while another auto insurance company might be a better match for the shopper’s situation. A.M. Best Company offers objective evaluations for every insurance company in the United States.
- Driver’s profile needed – Any blemish on the driving record will change the quote in the subsequent rounds of the selection process. Initial quotes from insurance companies assume the driving record is free of accidents and moving violations. The quoted premium can change dramatically if your driving record is not clean.
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Inexperienced insurance shoppers will fall for other tricks that are designed to gain attention in a long list of auto insurance quotes. Every driver wants to save money on the annual car insurance rates, but the goal of insurance must be, first and foremost, to mitigate the risk of loss.
Financial hardship can follow the policyholder for years if sufficient auto insurance coverage is not carried at all times. Low quotes must be evaluated to determine if one or more of the following is true.
A quote that does not contain comprehensive and collision coverage will be significantly less expensive than the other quotes. Lending institutions require borrowers to carry the comprehensive and collision components until the loan is repaid.
Liability coverage will pay for the damage to property belonging to third parties, but the policyholder will be responsible for damages sustained to his own vehicle.
There are some instances when you should consider switching to a liability-only car insurance policy.
Every state has laws that dictate how much liability auto insurance must be carried by every motorist. Some minimums are as low as $15,000. Insurance companies encourage drivers to carry $100,000 of liability coverage.
A quote that has the minimum amount for the state will offer a lower annual premium. Wise shoppers watch for this tactic.
No uninsured motorist
Although there are legal requirements for auto insurance, more drivers are dropping their car insurance and driving illegally. In accidents, the uninsured/underinsured component will pay for the losses incurred by the policyholder.
Policy quotes without this component will be much lower than full coverage policies.
High Deductible Amount
Even when all other amounts are equal, the quote with a high deductible amount will have a lower annual premium than the other quotes. This tactic draws many people into the process of getting “cheap car insurance.”
There are specific issues that will arise if the deductible on the auto insurance policy is too high for the policyholder’s personal situation.
- Unaffordable – Most auto insurance deductibles fall in the range of $250 to $1,000 per claim. The policyholder is responsible for the deductible amount. People who cannot afford loss should choose a lower deductible to prevent hardship following an accident. An amount equal to the deductible should be set aside in a savings account.
- Indicates character – Auto insurance companies that will use this tactic might do other unscrupulous things after the policy papers are signed. Quick response to customer inquiries and claims is essential in the relationship with a reputable auto insurance company.
Every action indicates the true character of the insurance provider.
- Combined obligation – Homeowners and business owners must set deductibles that are affordable following multiple concurrent losses. Significant weather events can cause the loss of a home, business, and vehicle in a matter of minutes. All deductibles must be affordable to the policyholder.
Evaluate Every Quote
Insurance shoppers will never pursue only the lowest quote returned in response to the request.
Investigating the lowest quote can fit in with the pursuit of the best possible car insurance coverage at affordable annual rates. After assembling the best coverage, you should choose three insurance companies and continue the process.
Popular discounts are offered by the insurance company representative, but you always have the option of requesting additional discounts.
Every possible discount plays an important role in making good insurance coverage affordable.
Insurance is designed to cover loss. Saving a few hundred dollars each year might be a costly decision if sufficient auto insurance coverage is not available when an accident occurs.