Is cheap car insurance a bad idea?

Low Cost Temptataions

In an era of spiralling premiums and can ever increasing costs of motoring, it can be tempting to choose a low cost, no frills motor insurance provider. It is small wonder that so many motorist look for sites where they can buy car insurance and pay monthly, like this one.  After all, motor insurance is yet another state imposed burden on motorists like road tax and the MOT, and understandably there is are many low cost providers willing offering "bare minimum" packages to meet the demands of the law. However, motorists need to consider that they may be running the risk of a false economy. Discerning motorists know that cheap car insurance is not cheap and cheap car insurance is not good!

Beware "Ghost Brokers"

In recent years many motorists spend time "shopping around" online for the best Insurance deal similar to a holidaymaker comparing low cost airline carriers before taking a holiday. However, this phenomenon has given rise to the recent distressing instances of price conscious motorists being conned by unethical "ghost brokers" who are fraudsters purporting to be middlemen able to cut insurance costs via industry contacts or achieving savings through economies of scale and scope. However, these unscrupulous dishonest brokers have, via ads on university and online motor sale sites have led many first time motorists into buying millions of pounds worth of worthless policies, which would have no legal standing of the client wished to claim in the event of an accident.

Excess Issues

The true worth of a motorists' insurance policy comes to the fore in the event of an accident, rather than the premium payable. This "crunch point" is where you most need the insurer, rather than merely fulfilling a legal obligation like motor tax. Established, main brand insurers offering standard third party fire and theft or fully comprehensive can be reasonably expected to offer breakdown cover, windscreen cover, courtesy car and key cover as standard. "No frills" providers may not even be contactable in the dead of night when your car has broken down in the hard shoulder on the M40 or the M62 in teeming rain or shivering cold! Although the established insurer will require you to pay a higher annual premium (or monthly installment) their policy excess which you must pay yourself in the event of a claim will usually be lower than the providers who charge a lower annual premium but will have a higher excess. If your car is of low value, a "No frills" insurance package may be of little or no value, especially if the excess you pay out in the event of an accident is equal to or exceeds the net realizable value of the car!

In Conclusion

As stated already, cheap car insurance may be a false economy. It is easy to be persuaded by clever advertising and populist bashing of the Motor Insurance industry into signing up with low cost providers. However, remember that quality comes at a price, and it is particularly true with the Insurance industry.