by Dan Seitz
Finding auto insurance online can be a frustrating experience. A lot of our online tools are based directly on customer feedback about how “wouldn’t it be great if you could…”, stuff we take to heart. But one thing that we always find troubling is whenever a quote engine comes back with a policy that might turn around and bite you. An auto insurance policy is a contract, and as with any contract, there are people who deal plainly, and then there are people who will hide little gotchas in the fine print. Here are five ways that seemingly low quote might just really be too good to be true.
#1) The Deductible
This is the big one. Forgive us for getting into car insurance jargon for a second here, but in insurance, there are what are called “insurance excesses”; essentially, what you’ll pay before your policy kicks in, decided on between yourself and the insurer. This usually takes the form of a deductible.
It’s not hard to understand: the higher the deductible is, the less likely the policy will be to pay out, and so the lower the premiums are. The trick is to strike a balance between a deductible you’re willing to pay and a price you can live with; whenever a quote comes back with a suspiciously low price, check the deductible.
#2) The Area You’re Covered In
This is a nasty one. Many people believe that once they’re insured, they’re insured everywhere. That’s true for some policies…but not for others. Some will only apply to the United States; other policies can even only apply to the state you live in! Check the language of any policy closely for where the policy applies, and if you have special needs, such as crossing into Canada or Mexico regularly, call the insurer directly.
This one is pretty straightforward; the more you use your car, the more likely it is to break down. Some policies, as a result, may have language about mileage: if you drive a certain number of miles per year, your premiums may go up from their initial low, low cost. Ask about the mileage requirements for the policy, especially if the price is lower than you expected.
#4) “Comprehensive” May Not Be So “Comprehensive”
Here’s a question: if you have car insurance, and you get behind the wheel of someone else’s car…are you still insured? You may not be, depending on the policy. Certain types of coverage may be taken out of cheaper policies to get the cost down. This may or may not be a problem, depending on how you drive and what your needs are, but even if a policy claims to be “comprehensive”, find out exactly what they mean by that, and what your responsibilities are as a consumer.
We all expect a few fees as part of the insurance process: application fees, for example. But these fees can vary wildly from company to company, and even from policy to policy depending on which company you go with. When you see a price you like, contact the insurer and ask them about the fees you can expect to pay: application fees, cancellation fees, things of that nature. And be sure to write it down, and confirm when buying the policy.
In short, take your auto insurance seriously: read the policy closely, and ask questions. If they’re a good insurer, they won’t mind a bit answering them. We don’t; feel free to give us a call at 1-800-SafeAuto to discuss your policy if you’ve got questions. We’re happy to answer them.