There are few things in life that can be as expensive as saving money in the wrong place. This is especially true for auto insurance, which is one of the largest monthly expenses for many people.
The problem with car insurance is that most people think they can save money by buying cheap insurance. However, this decision can actually lead to an unexpected increase in costs.
It is important to understand that cheaper car insurance often offers less protection. This means that if an accident occurs or the car is stolen, the policyholder may have limited protection and will have to pay the cost of damages out of pocket.
So it’s important to look not only at price when choosing car insurance, but also at what protection it offers. A higher premium may look more expensive at first glance, but may actually result in a lower financial loss in the event of an accident or theft.
Therefore, consumers should choose auto insurance carefully and research the different options and pricing structures to ensure they are getting the right coverage for their car and their financial needs.
Keywords: car insurance, savings, cost, protection, premium
The cost trap if the sum insured is too low
Care should be taken when saving on car insurance. Because too low an insurance sum can be really expensive in the event of damage. People often buy cheaper insurance to save money, but in the event of an emergency, the costs can quickly skyrocket.
An accident with personal injury can cause very high costs, which must be covered by the sum insured. If the sum insured is too low, you’ll have to pay the remaining costs out of pocket. This can quickly add up to several thousand euros.
It is therefore advisable to consider carefully in advance which sum insured is sufficient. Not only the minimum legal requirements should be taken into account, but also individual risks and needs. A higher sum insured may seem more expensive at first glance, but in an emergency it can prove to be a worthwhile investment.
- If you want to save money on car insurance, you should instead pay attention to the choice of insurance type and additional insurances.
- A higher deductible can also result in lower insurance costs, but should only be chosen if the financial risk is acceptable.
- Anyone who is unsure should seek independent advice and discuss all risks and needs with an expert.
The most important benefits of car insurance
When it comes to car insurance, many people only think about the price. But saving money can be expensive if the insurance doesn’t provide the benefits you need in the event of a claim. Therefore, it is worthwhile to check exactly which benefits should be included in the car insurance:
- Liability insurance: In Germany, you are not allowed to drive a car on public roads without liability insurance. This insurance is required by law and covers the costs if you cause an accident and damage other people or their property.
- Fully comprehensive insurance: Fully comprehensive insurance protects your own car against damage caused by yourself. It covers accidents, theft or vandalism, for example. However, fully comprehensive insurance is usually more expensive than partial comprehensive insurance.
- Partial cover insurance: Partial cover insurance covers damage to your car caused by theft, fire, glass breakage, storm/hail or wildlife accidents. It is cheaper than fully comprehensive insurance, but also offers less protection.
- Assistance benefits: In the event of a breakdown or accident, an assistance benefit can be helpful. It includes, for example, roadside assistance, towing, onward travel or overnight accommodation costs.
To save money on car insurance, it can make sense to reduce premiums by raising deductibles. However, you should keep in mind that you will have to pay more out of your own pocket in case of damage.
The danger of too many deductibles in car insurance
When it comes to car insurance, most of us think first and foremost about the amount of the monthly premium. But what many don’t consider is that saving money on insurance can quickly become a real problem due to excessively high deductibles.
If an accident occurs and the deductible is set too high, the cost of repairing the vehicle may no longer be fully covered by insurance. In the worst case, you are left with the remaining costs and have to dig deep into your own pocket.
Therefore, it is important to choose a reasonable deductible that you can actually pay in case of an accident. This way you don’t necessarily save money at the first moment, but in case of an accident you are on the safe side and no unnecessary financial difficulties arise.
- Tip: Compare different quotes and choose an insurance policy with a reasonable deductible. It is worthwhile to invest time in the run-up and to inform yourself comprehensively.
- For example, a monthly saving of 10 euros due to a higher deductible of 500 euros may save 120 euros over the course of a year, but in the event of an accident this can quickly become a financial burden of several thousand euros.
The influence of the no-claims bonus on the costs
With the no-claims bonus, car insurance companies reward their customers for accident-free driving. The longer you drive without damage, the higher the discount will be. This discount can have a positive impact on the cost of car insurance. However, saving on car insurance can also be expensive if you lose your no-claims bonus.
An accident can happen quickly, and if you don’t have comprehensive insurance, you have to pay for the repair costs yourself. This can be expensive and jeopardize the no-claims bonus. If you have several accidents in a year, costs can quickly rise and saving money on car insurance becomes a secondary concern.
It is therefore important to weigh the risks and arrange insurance so that you are well covered in the event of a claim. Higher insurance cover can be more expensive, but in the event of a claim you end up saving money. Therefore, you should not only pay attention to the no-claims bonus, but also to comprehensive coverage.
- The no-claims bonus can reduce the cost of car insurance.
- However, saving on car insurance can be expensive if you lose the discount.
- Comprehensive coverage is important to be financially secure in the event of a claim.
Comparison portals: opportunities and risks
The Internet has become an important place to gather information about products and services. Comparison portals are a very popular method of comparing prices and services of different offers with each other. Especially when looking for car insurance, this can be very helpful.
But be careful: comparison portals also have their risks. A wrong choice of portal can end up leaving you worse off than before. In addition, the results can be distorted if the portals do not take all relevant offers into account or are influenced by advertising.
Thorough research is therefore highly advisable before choosing a comparison portal. It is also worth obtaining quotes directly from the insurance companies and comparing them with the results of the portals. Because even here, sometimes more favorable options can be found.
- Opportunities: using comparison portals can save time and money and help one find the right deal.
- Risks: Results may be skewed if all offers are not considered. In addition, the portals may be influenced by advertising.
Conclusion: comparison portals can be a helpful way to save money when looking for car insurance. However, they should be used with caution and one should always consider other options as well. Thorough research and direct communication with insurance companies are essential.