Is Cheap Car Insurance Good For You?
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We’ve written a great about how to get cheap car insurance but we never stopped to consider if it really is cost-effective in the long run. This blog takes a closer look at whether cheap car insurance is worth it.
The economy is in a slump. Everything costs more. The cost of living is becoming prohibitive in the UAE. Add to that the mandatory expense of auto insurance and things start to look bleaker. So yes, in these circumstances a cheap car insurance policy will look like an oasis in the desert. But is it really a life-saving haven in the heat or just an illusion?
Yes, cheap car insurance brings you monetary relief. Yes, you get to fulfil the obligation of having car insurance, yet saving money. But none of this comes to anything if the car insurance doesn’t provide quality coverage as well. There needs to be a fine balance between the two for cheap car insurance to be affordable because after a while cheap car insurance will cost you where you didn’t dream it would.
Let’s take a closer look at what you can expect to lose out on with cheaper car insurance options.
Cons of Cheap Car Insurance
Very Little Coverage
One of the ways insurance providers can offer cheap car insurance is by limiting the amount of coverage offered in your policy. Third-party liability insurance is the best example. It is the minimum
insurance required by the UAE government but it only includes coverage for third-party damage. Who will pay for damages incurred by you? By opting for cheaper insurance you set yourself up for the risk of paying out more in case of collision and repair damage. Many would claim that this form of insurance is
not insurance at all because it provides no safety net for you.
Exceeding the Limit
You can always opt for a limit on your insurance policy instead of minimal coverage. But this can also backfire. Repair costs can vary according to what needs to be done but what if you exceed the limit of your insurance policy? If you have opted for the cheapest limit this is more likely than not. In the event that you’ve reached your limit, you will essentially be without any insurance and have to pay for any damage or repair expenses out of pocket. This will eventually increase your cost of owning a car than decrease it.
Another way cheap car insurance works is if policyholders opt for higher deductibles. A higher deductible, essentially, is what you choose to pay out-of-c\pocket before the insurance provider steps in with the coverage. The higher the deductible the lower the premium. However, this is not a way to secure cheap insurance. In case of an accident, you will end up paying more than you bargained for.
Cheap insurance tactic relies on the policyholder’s belief that they are careful drivers and will never encounter a collision or breakdown on the road. This may be true but we don’t use the road in isolation. Just because we’re careful doesn’t mean that others will be as well. A collision is sometimes unavoidable. In those instances, if you’ve opted for cheap car insurance you will most likely have to pay more out-of-pocket than you bargained for.
Pros of Cheap Car Insurance
That being said we’re not implying that cheap car insurance is without its merit. When done right it can bring both quality and financial gain.
If you have more than one car you can automatically negotiate for a cheaper premium to insure both under one policy. This spreads your coverage and limits over multiple vehicles. It also provides financial relief without the cost of quality coverage and benefits.
Similarly, using the same insurance provider for multiple insurances also brings down your premium. Combine motor, home, and health insurance. This way you can be sure that the coverage and quality will not suffer. Insurance providers go the extra mile for clients who invest in more than one insurance policy. They will also be willing to provide discounts on a continued basis in a bid to not lose your business.
Pay in One Go
This may seem costly, but it has its advantages. If you agree to pay the entire policy in one go you can demand a discount. It can be very significant if you add a No-Claims Bonus to it. The point is the same here – you save on insurance cost without sacrificing coverage.
Consult an Expert
Cheap car insurance can be a lot of guesswork. There are factors that you tend to forget or not know about. It would really help to know exactly what you’re getting in to. But consultations with insurance experts can be costly in themselves. You can hire an expert and increase your cost, or you could hop online to BuyAnyInsurance to get a consultation for free.
Their team of insurance experts has over fifteen years of experience in the industry. They know the ins and outs of insurance. They are also familiar with the UAE market. You can compare cheap insurance quotes on the website and then consult an expert on the same site before buying one. It can all be done on one platform!
The personal chatbox will get you in touch with one of the team members. They can then consult the policy you’re interested in. You can ask them the claim ratio of the company in question. They will be more than happy to help. They can walk you through all the points of the policy. It is a great way to clear your suspicions before buying an insurance policy.
Therefore take your time before you buy a policy. As they say ‘all that glitters is not gold’ similarly all cheap car insurance policies don’t have your best interest at heart. Let our experts guide you to the genuine policies among the false. Since policy can last 12 months it is wise to do thorough market research before signing up. This is where we come in to help.
Originally published Feb 15, 2021 00:31:00 AM, updated May 31, 2021