The Pros and Cons of Cheap Car Insurance

If you are in the market for a new vehicle, it’s a good idea to check premium rates before you buy. For example; insurance rates can fluctuate substantially between a Hyundai Sorento and Volkswagen Tiguan. Car insurance rate groups are determined by things like safety ratings, repair costs and replacement costs. Sometimes the difference in insurance costs can be in the hundreds or thousands each year. Add an extra $500 to your insurance costs over four years and that starts to add up.

If you drive an older used vehicle and have the ability to pay out of pocket for accident repairs, then you might decide to simply go with the minimum coverage required by law. This would allow you to save on collision and comprehensive premiums – which pay for physical damage to your car if you are at-fault in an accident or if your car is vandalized or stolen.

You may not know that in the event of an insurance claim, you will need to pay what is called a deductible. Ontario auto policy deductibles typically range between $250 to $500 and can be increased if you want to save more on your premium. As a rule of thumb, the higher your deductible – the lower your car insurance rate. The downside is that when you have a claim, you have to pay the deductible first before your insurance company covers the remaining cost.

It is important to note, that opting for a higher deductible to get a lower insurance rate may leave you with a heavy financial burden – on top of an already stressful situation.

Buying insurance policies online is certainly convenient, but they may come with a hidden cost. Without talking to an insurance professional, it’s hard to know if you have coverage you don’t need – or if you are missing something important like a ‘waiver of depreciation’ for new cars or loss of use – which for pennies a day, pays for your car rental if you have a claim.

One other important thing to note – talking to an insurance professional COSTS YOU NOTHING.

The final consideration when it comes to getting the cheapest price for car insurance is to always ask for a written quote to be emailed – so you can compare coverage. It’s unfortunate, but some insurance brokers and companies will omit certain coverages or make alterations to the coverage limits so that their quote looks like the lowest – when in fact it isn’t. The best way to get the lowest auto insurance rate is to give them the coverages so that you know the price reflects a true comparison.