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Are You Taking a Risk with Cheap Car Insurance?

Mar 11, 2011

Although many people are trying to cut down on their monthly expenses and one area where they feel they can make savings is car insurance, the question of whether this is a risky move has to be asked.  You have probably come across insurance companies promising to be able to provide the cheapest quotes and promising to be able to beat your current car insurance premium.  However one has to wonder how they can manage to offer these cheaper prices.

If your current car insurance company is quoting a certain amount for car insurance, then how can other companies be offering such reduced premiums to people?  Obviously some car insurance companies are charging too much and that is why it is possible for other companies to come in and undercut them.  But one thing you need to ask is where they are making these cuts.  Unless a car insurance company can offer you the same cover as the cover you are already getting with your current car insurance company at a cheaper price then you are probably not getting the deal you think you are getting. 

Many people think that they are paying for cover that they don’t need so having a car insurance company which allows you to only pay for the cover you want might seem like an attractive option.  But is it all its cracked up to be?  You need to make sure that you are getting the cover that you need so that your insurance will be worthwhile.  There is no point paying cheaper car insurance every month if you are not covered for the things you really require. 

If you take your car to work every day then it may be a good idea to have cover for a rental car if you need to send your car away to a garage to be repaired.  However if you are a stay at home mum then this may not really be a big issue and you could be paying for cover that you don’t really need.  This is one way to reduce the amount you are paying for your car insurance.

Another way that car insurance companies can reduce your payment is to take away cover for fire and theft.  This is not cover that anyone can really afford to go without.  If your car was damaged in a fire or was stolen and you were not covered for this then you could be seriously out of pocket.  And at the end of the day, no one knows what is around the corner.  You could easily come out one morning to find your car missing. 

You also need to watch your voluntary excess because a higher excess can reduce the amount you pay each month but it could leave you facing a hefty bill should anything happen to your car because the insurance company will only pay out an amount over and above your excess.  You will have to cover the excess out of your own pocket.

Cheap car insurance is great but you must make sure that you are still getting the required cover or it may just not be worth it.