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Budget Car Insurance What You Should Know
What You Need to Know About Budget Car Insurance
With most states mandating car insurance, many people find that budget car insurance is the only option available to them. This is especially true when you need the insurance right away and you don't have money for a large down payment. The caveat is that you often get what you pay for when you go with budget car insurance. These policies typically tout state minimum coverage levels. This is one of the things that makes it possible for companies to offer budget car insurance.
The tricky part is that these minimum liability coverages make them look cheaper than their competitors. But this often changes if the person wishing to be covered asks for a lower deductible or some other change in coverage. Suddenly the "budget car insurance" company has premiums just as high as the larger companies, but without the history of providing good service to customers.
This really becomes a problem if you are buying a car on credit. You may be required by the creditor to hold a comprehensive insurance coverage. Few budget car insurance companies still fit in a budget while providing comprehensive coverage.
Quality Service Vs. Low Premiums
When you choose your insurance provider, you obviously want low premiums. But quality service should not be left out of the decision on an insurance provider, especially if you are purchasing more than minimum liability insurance. Some examples of differences in service between budget car insurance companies and traditional car insurance companies can be striking.
Many of the larger, more traditional car insurance companies offer a grace period of up to 10 days on premium payments. It is not uncommon for a budget car insurance company to have little or no grace period. That means if your payment doesn't arrive during business hours on the due date, your insurance may be canceled. If you happen to have an accident then you will have been paying for insurance up until that point only to be uncovered when you need it most. In some states, your lien holder may even be notified of the cancellation and your car might simply be repossessed because your check is a day late in the mail.
Some of the better traditional insurance providers have 24-hour service guarantees as well as claim processing time guidelines. Budget car insurance companies may be hard to get a hold of on the phone when you have an accident. They may also be slow when responding to claims. Buying a policy that provides you with a rental while your car is out of use won't help you if the insurance company takes weeks or months to approve your claim.
A traditional insurance company may fight the claims made against you in an accident and get a low settlement. But most budget car companies will calculate whether using lawyer time will cost more than just paying their liability amount and leaving you responsible to pay all of the claim above their liability coverage.
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