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When the Cheapest Car Insurance Isn't the Best Choice

Published: January 2013

Shopping for car insurance would be a breeze if you only had to look at price: You would just zero in on the company that offers the cheapest premium rates, and you'd be set. Unfortunately, it doesn't always work that way. Going with the low-cost auto insurance provider may help save you money, but will it always give you peace of mind?

When the Cheapest Car Insurance Isn't the Best Choice

Cheaper isn't always better. If you're looking at the car insurance company with the lowest price, remember that you sometimes get what you pay for. Nowhere is this truer than in car insurance, where sometimes the cheapest policy means far lower limits of coverage. It can sometimes even mean foregoing critical coverage that you'll hopefully never need—but that would sure be nice to have if you find yourself in an accident.

Raising your deductible can lower your premium costs, but should you really set it that high? When you get car insurance, you may have the option of establishing a lower deductible. This is usually associated with higher premiums, but it also means that if and when the time comes to use your policy, you won't have to pay a large sum of money at once to cover your car repair. Raising your deductible has its pros and cons, but it's up to you to decide what's best for you.

Opting out of certain types of coverage may not be a great idea. Depending on where you live, you'll find certain laws in place that govern what kind of insurance you're required to have. It's important to find out what your state requirements are. Most states make liability insurance mandatory, while others also require you to have personal injury protection. But, keep one thing in mind: Just because you're not required by law to have coverage doesn't mean it's not a good idea to get it anyway. Cheap insurance policies usually only provide the basic state requirements, just enough to keep you legal. But, there may be a big difference between meeting the bare legal requirements and getting the best coverage for your money.

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Boosting your level of coverage could be worth every penny you put in. If you're looking at a cheaper car insurance policy, it's probably inexpensive for a reason. One of those reasons might be that the level of coverage you're getting isn't really high enough to cover potential damages. For example, the state of Florida only requires a minimum of $10,000 for property damage liability. But, what happens if you're deemed at fault in an accident and the amount of damages exceeds that $10,000? It's entirely possible, especially considering that cars aren't getting any cheaper. If this happens, you may need to pay for any damages that exceed your insurance policy. Not such a good deal, is it?

Sometimes, low cost can mean low quality. It doesn't matter if you're talking car insurance or restaurant service—customer service counts for a lot. Oftentimes, being able to discuss your insurance options with your agent in person or to file a claim with a real, live person on the telephone can give you peace of mind during a stressful time. To be absolutely certain that the company you're looking at hasn't lowered prices to match its level of customer service, get online and do your homework or talk it over with someone you know who has a policy with the same company. If you hear good things about their service, consider this a good sign.

Ready to find an auto insurance policy that's right for you? Visit the Auto Insurance section.

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This section highlights examples of precautions you can consider to help maintain your personal property. Please recognize that a particular precaution may not be appropriate or effective in every circumstance, and that taking preventive measures cannot guarantee any outcome. We encourage you to use your own good judgment about what's appropriate, and always consider safety.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2015 Allstate Insurance Company, Northbrook, IL.

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