Why you should not target only cheap insurance


Insurance is a wonderful risk mitigation means; however, it always comes at a cost. When choosing an insurance policy, usually, the price you pay should be directly related to you coverage you want and the level of claims you intend to receive in the event of any mishap.

cheap insurance

The truth is, sometimes the expenses you incur on these premium payments can seem like wastes – especially when it does not seem like you would ever have to collect any of the funds back. Hence, there is a common rush to get cheap insurance, at least unless there is a perceived risk by the insured.

Insurance plans come with various coverage options. Depending on the options you want and the parts with which you want to be covered in, insurance can be really expensive or really cheap. In essence, without having to change insurance providers, you can reduce the costs or expenses you have to incur on your insurance plan. Hence, if you want a cheap insurance policy, you can choose to reduce the things you tick on the insurance form. Another common way to get a cheap insurance policy, is to actually look for a cheap insurance provider. As you would imagine, there are apparent disadvantages of these. Just as pricy may not essentially mean quality, cheap insurance is most likely not a good idea and here are some reasons why.

  • Cheap Insurance means cheap services

While it may be true that sometimes, expensive insurance may simply be a brand pricing strategy to target highbrow clients and create an aura of quality, it may not always be the case. On a logical level, where the operating expenses are high and the running costs of providing these services are high, the price would naturally be higher. So, when you opt for a cheap insurance policy or provider, there are high chances that the services rendered to you would be of low quality and possibly unfavourable.

So, if you want to be guaranteed of quality services, you may have to opt for a higher priced insurance plan. Let us face it, targeting highbrow clients would mean that they are ready to deliver top-notch services. This is because there would be no excuse available for their poor performance. If quality of service matters to you, then cheap insurance may just not cut it. When you get the cheapest policy on the market, you may find that the customer service is not there when you need it and it would leave you feeling frustrated.

  • It could be a scam

I am sure you are aware of the usual phrase “if it seems too good to be true, then it probably is”. Well, in truth, this could be behind some of the really cheap insurance policies you find around. The way swindlers and scammers work is to first lure you in. to lure you, or course, requires a lot of sweet talking, cool deals, and a whole lot of discounts. Basically, everything is cheap. If the insurance is too cheap, it is probably a scam.

This is why some people face challenges when trying to get claims. When the insurance is cheap, the insurance company would probably do all that they can possibly do to find reasons why you cannot receive your claim. It could have been a set-up all along, or the truth may just be that they cannot deliver on the very juicy promises they lured you in with. To avoid these, cheap insurance may not just work out.

  • It could fail to serve the purpose it was gotten for

Okay, in an attempt to get cheap insurance, you may need cut down on the policies you sign up for. In essence, when getting an insurance on your car, you would cut down on coverage. So, you could obtain coverage for third party accidents or damages and probably third party hospital cost. Picking only those two would significantly reduce the cost of premium you have to pay. However, where there is an accident that completely destroys your car or happens to affect you, it would seem as though you did not get an insurance at all in the first place.

Opting for a cheap insurance can work counterproductively. Assuming the situation above, where that occurs, you would need to then pay out of your pockets to get a new car or treat yourself medically. Of course, the cost of doing that would definitely be more expensive than paying those yearly premiums you were trying so hard to avoid in the first place. The cost is always relative to what coverages and services you receive. In simpler terms, cheap insurance will fail you if you are not careful.

  • Misinformation

One challenge of getting cheap insurance is the misinformation that could come with it. Of a truth, not every person is cautious enough to read their lengthy terms and conditions. These terms and conditions, even when read, are sometimes biased in the actual sense. Hence, when you get a cheap insurance coverage, and it is time to make a claim, you may receive the shock of your life.

“Oh, sorry, the coverage is up to a limit of $5,000” “You cannot make claims until after 3 years” and so on. These things may ne stated, but might be misinterpreted by you when you hear the cool deals. At the end of the day, you might end up with high costs to settle out of your pocket. Going on to choose high deductibles on your auto insurance policy in order to get lower premiums will often leave you with higher out-of-pocket costs at the time of an accident when you need it the most.

  • That is not the essence of Insurance

Finally, the essence of insurance is not to save money but to protect oneself. While the cost of doing this may sometimes seem exorbitant, you need to constantly remind yourself that anything worth doing at all is worth doing well. If you are getting an insurance to protect your child from accidents, it should be able to do just that. Hence, as long as it achieves what it is meant to do, cost should not be a challenge. At least, not principally.

These points should convince you that cheap insurance may not always be the way. There are, however, good ways to strike a balance between cost and benefit.

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