Auto insurance is one of those things in life that seems like a complete waste of money, right up until you actually need it. In many states (Illinois for sure) it has been a state law that you have to have it to operate a vehicle. The police ask for it all in one word: licenseregistrationandproofofinsurance (translated into drivers license, vehicle registration and proof of insurance i.e. insurance card).
We are constantly berated with commercials that advertise the cheapest premiums for auto insurance. Lowest deductables and lower deductables if you don’t have to file a claim year after year. What you have to keep in mind is that the insurance company is a business. They want you to pay premium after premium but never make a claim. When you have to use the insurance, it costs them money (this is why your rates go up after an accident).
No matter what product you happen to be discussing, one rule remains the same. You get what you pay for. If you decide to go with an insurance carrier that offers a premium that is so low, it seems too good to be true, maybe in fact, it is. Recently in southern Illinois an insurance broker got into a little hot water. He was offering insurance to drivers at unbelievably low rates. Lots of people flocked to him because it was the minimum needed to be legal. As it turns out, one of the customers got into an accident and had to file a claim. This agent was not only fake, his insurance cards were illegal and all of the drivers had been driving with no insurance what so ever. He had been pocketing the premium money for years. The moral to that story is, stick with a company that is big enough that they are well known and will pay out when the time comes.
As stated before, insurance companies are running a business. If you go with a cut rate company, they will try to get you with fine print so they don’t have to pay. The bigger (and more expensive) companies like Allstate, StateFarm, even Geico are big enough that paying your claim won’t bankrupt them. This doesn’t mean that they are going to just hand over a check, but at least you have somewhat of a chance of getting the payment you deserve after all the months of premiums you have paid.
You insure you automobile for several reasons. It may be the law in your state, you want to protect the investment you have made in your vehicle, and in case the person you were in the accident (or even passengers in your own car) wants to sue you, in theory the insurance company has your back. If you are dealing with the cheapest insurance, you can kiss that kind of support goodbye.
So when it is all said and done, remember the golden rule. You will get what you pay for. This doesn’t mean buy the most expensive, but find a well researched company that has a good track record and go with them. Buying the cheapest insurance you can find will almost always end up costing you more in the long run.