Opting for Cheap Car Insurance, is it Too Risky?

Having a valid car insurance is mandatory for every vehicle owner in the UAE. It can help you cover the expenses in case of theft or total loss of the vehicle. In a bid to save more money, many people seek to buy cheap auto insurance. 

Is buying cheap car insurance a good idea? Let’s Find Out

Pros of buying cheap car insurance

While purchasing a car insurance, it is possible that your priority is to reduce the cost of car insurance premium. It might be a good idea to purchase a cheap car insurance if your car is old and you are confident that you will not need a comprehensive cover in case of an accident. However, it will save you only a few Dirhams since the cost of comprehensive and third-party insurance don’t vary to a large extent. On the other hand, there are several cons for buying a cheap car insurance which might compel you to rethink your car insurance priorities.

Cons of buying cheap car insurance

When you purchase a cheap car insurance, you deprive yourself of many essential benefits which can lead to disappointment in the longer run. Let us delve further into the issue to understand why opting for cheap car insurance can be a bad idea.

The sole purpose of buying car insurance is to save your out-of-pocket expenses in case of an accident and to keep your safe in terms of legal liabilities. If you opt for a cheap car insurance and you met an accident you will be charged a hefty amount to compensate for injuries, damage, repairs, etc. caused to the third party. Besides, you will require paying for your vehicle and the damages borne by you in the accident since cheap car insurance covers only a limited amount of loss and it may rob you of many necessary benefits. Therefore, choosing cheap car insurance can be a fatal mistake.

Also Read Car Insurance Deductibles – What Are They and How Do They Work?

Cheap Car Insurance Does Not Offer Sufficient Coverage

All car insurance policies give monetary coverage to the owner's vehicle. In each case, the level of coverage might vary according to the policy. The cost of a car insurance policy plays an important role when it comes to covering the expenses and enjoying the benefits. Typically, a lower package in vehicle insurance implies less coverage. A cheap car insurance policy is reasonable simply because it might offer coverage for third parties. But third party policy covers the liabilities of third parties only. You will lose a huge sum of your hard-earned money if you undergo an accident that damages your vehicle. But if you chose premium car insurance, your vehicle gets protection along with some serious benefits.

It is always better to keep your vehicle protected with premium car insurance as it helps to eradicate the chances of losing a huge amount of money. There is no point in purchasing car insurance that would not be able to help you at the time when you need it the most. Purchasing a premium car insurance policy can save your hard-earned money against all odds. You won't get this kind of financial security in cheap car insurance policy. Therefore, it's better not to go with cheap policy.

Less Benefits

A vehicle insurance policy is a mix of advantages and coverage offered by the car insurance company. Even though premium insurance is costly, there is no guarantee that they provide all the essential benefits. However, cheap car insurance policy comes with fewer benefits. The insurance company reduces the premium of car insurance by lowering the coverage advantages. The only thing important is that your benefits should not be stripped away when you buy a reasonable insurance policy. If you get premium coverage benefits from a car insurance company at a reasonable price, you should buy it in a heartbeat. However, you will face huge financial loss if your insurance policy doesn't even cover the expenses at the time of a small accident.

For instance, you have appointed a driver for your car. The driver along with some passengers met an accident. What happens with a cheap car insurance policy is that the owner of the car is provided with the personal coverage. But the driver and other passengers do not get any kind of coverage. So you have to help them with your own money. So, it's often advised to buy an insurance policy that covers not only the owner but the driver as well as the passengers.

You should always analyze different car insurance policy and see which provides the most essential benefits at a good price. It will assist you with deciding if a policy comes at the expense of fundamental advantages or not.

Read More Commercial Car Insurance in the UAE

Higher Deductibles

One more disadvantage of purchasing a cheap insurance policy is that it accompanies huge deductibles. A deductible refers to a portion of the total amount that the vehicle owner pays at the time of buying the policy. You are needed to pay your deductible sum and then your car insurance company pays its portion of the total claimed amount. If the deductible amount is higher, the insurer has to pay a lower amount towards the total claimed amount. That is why most of the renowned insurance companies offer vehicle insurance policy at lower prices if the deductibles are higher. 

In this way, it is important to check the deductible sum that you will have to pay before purchasing a reasonable motor insurance policy. If reasonable insurance comes with a higher deductible, you will have to pay less at the start, but at the time of final settlement, you will be required to pay a hefty amount. In case you can't pay such a huge amount, it is smarter to purchase a more costly insurance policy that accompanies lower deductibles.

Poor Customer Support

With regards to the car insurance company, there is a cost for almost everything. A costly insurance policy might come with better coverage, extensive benefits, and loving customer support. Despite what is generally expected, a cheap car insurance policy offers just basic benefits and poor customer support. If you opt for a cheap insurance plan, the company will deprive you of basic services which include cooperative customer support.

When you pay for premium insurance policy, you receive multiple benefits like roadside assistance. Roadside assistance includes tire change, towing, etc which are very helpful if your car breaks down in the middle of nowhere. But if you have paid for a cheap insurance plan and your car breaks down in the middle of the road. No one is going to help you. Paying a little more for this service will not squeeze your wallet. 

Additionally, a cheap car insurance policy might take a very long time to settle the claims. Hence, it is mandatory that you go through the customer services these policies and then decide which is ideal for you. If a reasonable insurance company has a bad reputation because of poor customer support, you should reject it and plan on purchasing a higher premium policy that offers better coverage and great customer support.

No Cashless claims

Probably the best thing that the vehicle insurance policy offers is cashless claims offer. Vehicle insurance policy with cashless claims permit the vehicle owner to get their car fixed at a garage appointed by the insurance company. In this case, you don't have to pay any money for the repair as it is paid by the car insurance company itself. Hence, it saves you a lot of money and your pocket remains filled.

Nonetheless, if your vehicle is being fixed at a garage that is not appointed by the insurance company, then you can't raise cashless claims. If you have opted for a premium insurance policy then you have the option of raising reimbursement claims to get your money back. But in case you have chosen a cheap car insurance policy then you can't even raise a reimbursement claim and the money will surely come from your pocket which can be very disappointing. So, you must purchase an insurance policy that comes with the facility of cashless claims for better satisfaction.

How to choose the best motor insurance policy?

Choosing the best car insurance policy can be confusing as there are plenty of policies out there claiming to be the best. The best insurance policy will help you cover all the financial burdens when your car goes through a horrific mishap. Here are some of the tips to buy the best insurance plan:

1. You should write down your requirements before choosing your car insurance company.

1. Go through the customer reviews about the company on the internet.

1. Calculate the IDV of your vehicle.

1. Buy a plan which suits your needs.

1. If you buy a new car, you should buy a premium car insurance policy immediately.

Conclusion

While buying a cheap car insurance plan might suit your budget, it does not necessarily suit your car. If you wish to purchase the cheapest car insurance in the UAE, you can visit our car insurance webpage where you receive comparison of car insurance quotes from the best car insurance providers in the UAE. Based on your need and your preference, you can purchase the most suitable car insurance in minutes saving time and money.