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Car insurance. Is it possible to be cheap AND good?
We all know the saying ‘you get what you pay for.’ If you apply this to car insurance does that mean cheaper insurance offers less protection?
Budget Direct Insurance provides one of the cheapest policies for experienced drivers but some customers have asked the question, “Does that mean you’re cutting corners on your cover?”
That’s a perfectly reasonable question. But here we let you in on a few home truths about the insurance industry and why paying more for your insurance doesn’t necessarily mean better cover or service. Here’s why:
- If insurers are happy to insure high-risk motorists then beware. Insurers with a customer-base that includes high-risk motorists usually have more claims to pay. More claims means the insurer has to claw back that money by increasing their premium…. and that increase tends to impact all motorists not just the high-risk category. So premiums will most likely increase for all their customers. If your insurer is picky about who they insure that’s a good thing. If they only insure safe drivers then claims are less and premiums can remain low. A customer-base of safe, experienced drivers means that no-one is having to subsidize risky drivers.
- If your insurer is keen to understand more about how you use your car then take that as a positive indicator. For instance, do they want to know who the main driver is and how you use your car? If not, beware as you may be paying for ‘hidden’ extras that don’t apply to you.
- Buying direct from the insurer without an agent or broker means there is no commission cost so you make an instant saving on your premium.
- Is your insurer housed in a fancy office overlooking Marina Bay Sands for instance? Who pays for that? Ultimately these extra expenses paid out by the insurance company are borne by the customer in the form of higher premiums.
- Traditional well-established insurers tend to rely on older more cumbersome forms of technology. A newer insurer, however, has the benefit of being able to make use of and install the very latest innovations. For example Cloud technology is making back-end processes easier and therefore cutting down on unnecessary overheads. And again that means less expense being passed onto the customer and therefore lower premiums.
- Make sure you can customize your insurance plan too. If your insurance is bundled together and includes lots of ‘extras’ then check whether you will be using those features. For instance your insurance might include an overseas emergency allowance but that is no use to you if you don’t intend to drive your own car abroad in Malaysia or Thailand for instance. Make sure you’re paying only for the features you need and no more as this can bump up the price of your insurance premium considerably.
So there’s your answer. Cheap CAN be good.
If you’re keen to make a big saving on your car insurance without cutting corners on your cover then get a quote at Budget Direct Insurance.