The Price Isn’t Right! Unveiling The Truth About Cheap Car Insurance

When it comes to cheap car insurance, the old adage of something sounding too good to be true certainly holds weight. There's no denying the delight we all experience when finding new ways to save money. But what happens when a saving has a hidden cost? The reality behind cheap car insurance is rarely pleasant, with less coverage being just one of the challenges you may face. This is why Dialdirect focuses on providing consumers with dependable car insurance plans.

Cheap car insurance: an illusion of saving

Every day, we are faced with scenarios where the lure of a lower price is overwhelming. But in many of these situations, taking a step back and considering the risks is better. Could the saving turn out to be nothing but a costly illusion that compromises your financial security?

The cheapest car insurance on the market could see you save a few hundred rands each month. However, financial security comes from knowing that you're properly covered when something goes wrong. With adequate cover, you won't be left saddled with a financial burden for which you did not plan. That immediate saving you got from switching to cheap car insurance isn't going to help when your insurer denies your claim.

The biggest problem with cheap car insurance is that it often means less coverage — and this isn't only a lack of comprehensive protection against theft, fire, or accidental damage. You could find yourself responsible for the cost of towing your vehicle from the scene of an accident, along with other costs that are often overlooked. You could also find yourself running the risk of dealing with an unnecessarily complicated claims process or an unsupportive insurer when your stress levels are already high — something you won't find mentioned in your policy documents!

The downside to cheap vehicle insurance

Cheap is not the same as being affordable[1]. The low price of cheap vehicle insurance achieved through various tactics could leave you at a disadvantage. Consider some of the following: 

 1. Poor coverage and inadequate protection

You’ll be familiar with most insurers offering comprehensive; third-party, fire, and theft; and third-party-only car insurance. Companies price each type of insurance differently because the coverage isn't the same. But with cheap car insurance, you may have even less coverage thanks to unusual restrictions and exclusions. Your cheap insurance policy might not cover certain high-risk vehicles against theft and could even limit claims for damage to your car while parked. One of the easiest ways for an insurance provider to keep premiums low is to limit the cover in value and the type of incident — something you might not be aware of until your insurer denies your claim.

2. Limited customer support services and claim handling

Another way a cheap insurer might be keeping premiums low is by having limited customer support services. You may struggle to get hold of a customer service representative, and when you do, you could find they lack training and the resources to help you. These issues can be particularly frustrating when you're trying to make sense of your policy or need help filing a claim.

When you're dealing with a company that doesn't prioritise customer service, you're likely to find the claims process slow and inefficient. You may find there is no easy way to track your claim, or you might have to deal with repeated claim denials even when claiming for an incident that your policy covers! And then, you have to work your way through a time-consuming process to dispute the denials. Alternatively, you could find the payout taking much longer than expected when your insurer approves a claim, causing further inconvenience when you're already dealing with a lot of stress. 

Cheap car insurance may save you a few rands on your monthly premiums. However, the potential for poor customer service and a difficult claims process makes it a less-than-desirable option. After all, insurance is also about security and peace of mind!

3. Hidden fees and deductibles

One of the more insidious aspects of cheap car insurance is the presence of hidden fees and high deductibles. The low premiums might appeal to you, only for you to find out later that there's more to the story.

The hidden fees could come in the form of surcharges, administration fees, penalties, and even a charge to change your policy. Separately, these fees might not be high, but the overall cost can quickly add up. More noticeable would be the impact of a high deductible or excess (the amount you must pay before your insurance begins to cover the costs).

Imagine you are in a car accident that results in R10,000 worth of damage to your vehicle. You submit your claim, only to be told that your deductible is R6,000 — meaning you end up paying for more than half the repair costs out of your own pocket, even though you have insurance. Therefore your low-cost car insurance proves to be more expensive in the long run.

4. Unreliable insurance providers

Finally, there is the very real risk that your low-cost insurance provider is not financially stable or does not comply with industry regulations.

You want to know that your insurer can pay out when you do make a claim. You don't want to have to worry about a sudden policy cancellation or, worse, the insurer going insolvent. It is essential that your insurer complies with industry regulations because these ensure fair practices and protect consumers. Disregarding regulations may keep costs low, but it could also leave you unprotected in case of a dispute or claim denial.

Car insurance you can trust

It's essential to be aware of the pitfalls of cheap car insurance, but it is equally important to understand the benefits of investing in a trustworthy and reliable insurance provider.

With a reliable insurance provider, you can expect comprehensive car insurance and more affordable but less robust options. Comprehensive cover might cost more, but it offers the greatest protection and saves you from unexpected out-of-pocket expenses later. Regardless of the level of cover you opt for, with a reputable insurer like Dialdirect, you also have access to professional support, including a 24-hour assist line. You can depend on receiving timely and empathetic assistance when you need to make a claim with us. In addition, you rely on Dialdirect to handle queries efficiently and effectively. 

In addition to reliable car insurance, Dialdirect also provides added benefits in the form of rewards, loyalty programmes and more. Our perks provide additional value because we’re committed to building long-term customer relationships. 

Get car insurance quotes in minutes with Dialdirect

Cheap car insurance might seem enticing, but it's important to consider its potential downsides. Opting for a trusted provider like Dialdirect ensures reliable car insurance cover, professional support and added benefits, offering you peace of mind that far outweighs the allure of short-term savings. Get a quick and easy online quote from Dialdirect today.

Sources:

[1] The Citizen: Don’t take the insurance bait, cheaper is not always better, say AA

Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.