I hate paying more than I should for anything. But, there is something especially irksome about paying for services I don’t use. So, I find myself carefully monitoring my subscriptions, memberships, utilities, and insurance plans. When possible, I cancel the ones we don’t use or downgrade services to save money. While there are many things I will do to streamline our budget, one thing I’ll never overlook is the value of insurance coverage. Other finance bloggers may tell you that canceling your car insurance is a good way to save money. However, my family recently found out first-hand why you shouldn’t skimp on your car insurance policy.
Dealing with the Automotive Emergency
Dealing with auto emergencies is the greatest fear for any adult with a newly minted teen driver. Unfortunately, a few weeks ago I found myself in that exact situation. During final exams, my niece was staying with me while she studied. The week had been strenuous, but she was nearly finished. Then, on her way to the last exam, her car broke down in the middle of rush hour traffic. After a frantic phone call, I rushed out the door. She was stalled in the turning lane of a busy intersection, scared, and unsure of what to do.
By the time I arrived, the sheriff had already arrived on the scene to assist. Although I knew I couldn’t leave her car blocking traffic, we were also in a time crunch. Her school has a strict attendance policy, especially during finals week. I simply didn’t have the time to arrange for a tow truck and get her there on time.
Luckily, fortune was smiling on us that morning. In addition to the good Samaritans who helped push me onto a side road, my mom assured me that insurance would take care of it.
The Perks of a Comprehensive Car Insurance Policy
Although I wasn’t entirely sure what my mom meant, it turns out that their insurance plan covered all the necessary services. My parents have always told me that you shouldn’t skimp on your car insurance policy, and now I truly understood why. This was already a high-stress situation. But, it would have been ten times worse if we had cheaped out and chosen a different plan.
Fortunately, we had made the wise decision to get full coverage for her vehicle. Besides basic liability and collision, her coverage included roadside assistance for instances just like this. Without this feature, I would have wasted an entire day trying to find an affordable service and paying it out of pocket. Instead, we went with the first available company and had the car home in less than an hour, knowing insurance will reimburse all expenses.
5 Reasons Why You Shouldn’t Skimp on Your Car Insurance Policy
I’m not saying that canceling your insurance won’t save you money. If you own multiple vehicles or work from home, you probably don’t need policies on cars you don’t use. However, cutting corners with your car insurance could cost you more in the long run. Here are 5 good reasons why you shouldn’t skimp on your car insurance policy.
1. You’ll regret opting for the higher deductible if you have to pay for repairs.
Choosing the cheapest coverage will save you on monthly payments. But, those same policies also come with high deductibles. This isn’t an issue if you don’t need the services. However, it could come back to haunt you if you have an accident or own an older car (like my nieces) that may break down again. Some plans may not cover the costs until you rack up $2,000-$3,000 in repairs. So, you’ll be left paying anything below this threshold out of pocket.
2. You get what you pay for.
Cheap monthly payments are great, or at least until you actually need the insurance coverage. Then, you are at the mercy of the fine print of your policy. If you choose the skimpiest option, chances are that they will offer minimal support. Selecting a better plan could mean the difference between a smooth resolution or a huge headache and a sizeable bill from the repair shop.
3. Your rates will likely skyrocket if you make a claim.
Another reason you shouldn’t skimp on your car insurance policy is because of what happens after an accident. While the rates may have been low in the beginning, they will likely skyrocket if you file an insurance claim. Cut-rate plans don’t typically include accident forgiveness. Although you’ll pay a bit more, this feature protects you from paying penalties after an accident. So, it’s better to choose more coverage from a reputable insurer that offers this incentive as a safety net.
4. Gambling with insurance coverage isn’t a bet you want to lose.
Choosing basic coverage may save you money upfront, but you will be the one left paying the bills later on. The high deductible won’t be an issue if you are involved in a major collision and have extensive repairs. However, smaller issues won’t even come close to reaching the limit. And, you’re taking a pretty big gamble if you pass on the add-ons like personal injury protection, gap insurance, or rental car reimbursement. Therefore, it’s better to err on the side of caution, especially when it comes to young, inexperienced drivers.
5. You could be putting those you love in danger.
Everyone loves a good deal. But, choosing a discount insurer or barebones coverage plans could leave you vulnerable. Although basic liability coverage takes care of the driver, it doesn’t cover anyone else in the vehicle or involved in a collision. In addition to the repair costs, you could find yourself with huge medical expenses and legal action. Paying for premium plans will protect you and your loved ones if you are ever in an accident.
Choosing the right car insurance policy isn’t a decision you should make lightly. Shop around, compare plans, and choose a company that has a good reputation. Because when it comes to taking care of those you love, you should never skimp out or cut corners.
- Why You Need Car Insurance Even If You Don’t Own A Car
- Shopping Around For Car Insurance? Tips For Securing The Best Value
- Which Car Safety Features Are Worth the Extra Cost?
Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.