Is the cheapest auto coverage the best choice?
“You get what you pay for.”
That’s what people say when it comes to buying electronics, cars, clothes, alcohol, airplane seats, homes, and almost every other consumer product. Even though people like to save money on most things, they usually agree that the best stuff costs more. Why is it that so many people think the best auto insurance policy is the cheapest?
I get it. Low rates save you money. You want that money to spend on things you actually want instead of paying for mandatory auto insurance. You get a standard auto policy for the lowest price available and get on with your life. When something happens on the road you’re pretty well covered from most things under that bare minimum, but sometimes the standard policy comes up short. That’s why it’s important to decide what means more to you: saving on premiums or having the best insurance policy for your needs.
Here’s what you get when you spend a more on coverage:
More perils covered
Standard policies provide $200,000 (in most provinces) in third-party liability coverage, accident benefits, and uninsured motorist protection. However, you can extend your protection with optional coverage
Raise your liability coverage to avoid paying out of pocket for pricey lawsuits. You can also make sure your car will be covered in the event of all sorts of natural perils like wind debris, floods, storms, and more. Coverage is even available for damage sustained because of attempted theft.
When looking to increase coverage with your insurer, you can either ask for specific individual perils or get packages such as collision, comprehensive, or all-perils coverage – each of which offer benefits beyond the basic policy.
Higher benefit amounts
Another thing about the basic coverage is that it won’t pay out as much as it could. As I mentioned, you can increase your maximum liability coverage from $200,000 to as much as $5 million. Most people don’t need that much insurance regularly, but it only takes one bad accident to leave you on the hook for hundreds of thousands of dollars in damages if you cause serious injury.
Conversely, you could be injured just as badly. It’s true the other party should cover you, but what if their insurance isn’t up to the challenge? Increase your medical and rehabilitation benefits to better cover you in worst-case scenarios. It could be the difference between receiving $30,000 and $60,000.
Premiums don’t mean everything
At the end of the day you don’t always get what you pay for. Plenty of products and services are overpriced when a less expensive competitor performs just as well. Insurance companies are the same way. The highest premiums don’t automatically mean best insurer. Consider additional factors like the company’s reputation with customers. When you shop for insurance, always compare to find the right policy for you.