Cheap auto insurance, could end up costing you

When talking about buying cars, insurance, homes and peanut butter there are too conflicting (well, there are more but we’ll focus on two in this article) forces and arguments. One, quality and good service costs money and unless you want to regret it later it is worth paying a high insurance, expensive / home or the top peanut brand. The second argument is that pricing answers to more forces than simply quality of service, goods or the coverage offered. For instance when buying a house, the price you pay is not restricted to the quality of the construction and the location, or the services it includes. It also depends on the price the owner paid for it, the profit he/she is hoping to get from it, how well the real estate company is doing or a dozen other factors.

As you can see both these arguments by themselves are sound. You won’t buy a top car for the price of a Skoda or a Yugo. On the other hand the same car, same year same model can sell for different prices for reasons not related to the quality or condition of the cars.

The smart move is to combine both these lines of argument. If an auto insurance seems to good too be true, then it probably is. At the same time don’t pay more for a car insurance just for the sake of it. But, and here comes the crux of the matter, how do you know when you are paying a fair price for good insurance coverage and when you are being taken for a ride you hadn’t planned. The answer is one word, COMPARE.

A famous soap company in Spain had a well known advert running for years. This particular soap was more expensive than most of the competition. The claim was that this specific brand was 3 times as powerful and needed 3 times less product to clean the same amount of dishes, making it in reality a bargain. The final phrase was always, Check out the rest, compare them and if you find something better, buy it. The idea of the soap company was to challenge the audience to compare and find a better deal.

That is a good challenge for all potential auto or car insurance buyers. If you compare different insurance companies and policies you will have a good idea of the going price and if you are being ripped off or not. Don’t take the first insurance you are offered, or the insurance company you have always used, as the only company out there. There are dozens and dozens of companies from which to choose from.

Your first step must be finding out what is important, what you need out of your auto insurance. One you have done that, make a list of the your “must have” auto insurance cover and ask for quotes with this coverage, and only this coverage. Then go online and ask for ten quotes from ten companies and compare away.