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Why choosing the best car insurance isn’t about the cheapest plan

While it’s understandable to want to shave off a few dollars on your car insurance policy, it’s important to understand whether a cheaper policy is really worth your while in the long run.

Before you jump at the cheapest offer, it’s best to consider factors beyond a car insurance policy’s price.

Instead of focusing on just price, choosing a car insurance policy which fits your needs and offers you the best protection should always be the number one priority during the selection process.

A cheaper car insurance may increase your policy excess

While you may be in for a lower premium with a ‘cheaper’ car insurance policy, this may mean that the excess you’re signing up for is higher than it otherwise would be.

This makes perfect sense as insurance providers want to cover their risk in the event you get into an accident and end up needing a high coverage amount.

A lower monthly premium typically means the policyholder will need to fork up a higher excess in the event of an accident.

This is a major trade-off you’ll want to consider before choosing a lower premium on your policy. You may end up paying more in the event of an accident than you would with paying for a policy with a higher premium but lower excess.

Ultimately, deciding between a higher excess or a higher premium depends on whether you can afford to fork up a higher excess on the spot should an accident occur.

Instead, you may prefer to pay a higher premium monthly to your insurance provider in order to avoid needing to pay a larger lump sum excess when an accident does unexpectedly happen.

A lower monthly premium could mean lesser coverage

While you might save some cash on a car insurance policy with a lower monthly premium, take care to make sure that your policy really covers all your bases for protection on the road.

The lower your premium, the less likely it is to be a comprehensive car insurance policy that protects you across a variety of scenarios.

Below is a summary of the different types of car insurance you might be paying for:

Third-party only insurance

Third-party online motor insurance, also known as TPO insurance, is the minimum car insurance coverage legally required of drivers.

The only thing this type of insurance covers is third-party liabilities in the event of an accident. This means if an accident is proven to be your fault, the coverage granted is specifically for the third party’s medical expenses if injured or for their car damages.

TPO insurance does not cover repairs for your own car or your own injuries.

Third-party fire & theft insurance

This type of insurance is similar to TPO insurance, except that it covers instances of fire and theft.

Third-party fire & theft motor insurance still does not cover repairs for your damaged car.

Comprehensive insurance

Comprehensive car insurance typically includes coverage for both parties involved the accident, along with repairs for damage to both cars.

It offers the most coverage in the event of an accident and can be made even more comprehensive with specific add-ons such as for natural disasters, theft or political unrest.

It’s worth noting that while third party and third party fire and theft policies typically cost less than comprehensive car insurance policies, a comprehensive policy covers the widest range of scenarios that could happen to you on the road.

Opting for a comprehensive car insurance policy could save you much more over time, as roads are unpredictable and accidents can be extremely costly depending on the severity of them.

Protection for the family or other passengers

If you’re married or have children, it’s even more crucial not to forgo comprehensive coverage for the sake of a lower monthly premium.

Certain comprehensive policies offer protection for not just the policyholder but also cover family members who drive the vehicle or who are passengers during an accident.

In seeking a less costly car insurance policy, this might be a crucial form of coverage which may not be covered.

For the sake of your little ones’ safety, always check to see if your policy offers protection for your family before considering a lower premium.

Valuable add-ons cost more

By simply considering a car insurance policy with a lower premium, you might be missing out on some valuable add-ons.

These add-ons help to personalise your coverage and protect you against exactly what you’re most at risk for.

For example, if you live in an area prone to floods, you might consider tacking on a natural disasters add-on to your policy. You may live in an area that’s prone to theft, in which case, you’ll want to pay slightly more for a car theft add-on.

Your car insurance policy should take into account what you’re most at risk for in order to best protect you from events that are most probable or likely to happen.

While no one likes to think about these events actually happening, it’s better to be pragmatic and cover your bases just in case they do.

Conclusion

The best car insurance policy needs to suit your particular situation and circumstances in order to serve you better for the long haul.

Always compare and choose a car insurance plan that suits your needs best, even if it costs more or requires choosing add-ons.

Your future self will thank you!

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