Is "cheap" car insurance good enough?

Is cheap car insurance good enough?

Cheap car insurance can be a good choice if the policy gives you the coverage, limits and deductible you actually want. The catch is that the lowest quote is not always an equal comparison. Before choosing it, compare the same coverages and limits, then check what you could pay out of pocket after a claim.

Key takeaways

• A cheaper quote doesn’t automatically mean worse insurance.

• Compare the same coverage limits, deductibles and optional coverages before comparing prices.

• A higher deductible can lower your premium, but it also means paying more out of pocket after a covered loss.

Saving money on car insurance is good. Afterall, there're all kinds of fun things you could use that money for instead.

The trick is figuring out whether a cheaper quote is actually a better price, or whether some of the coverage you needed changed along the way. Lower limits, higher deductibles and fewer optional coverages can all bring the number down. 

So the goal is not to avoid “cheap” car insurance. It’s to know what you’re buying before the low number wins the argument.

A more useful comparison starts with the same coverage choices, then looks at the premium, deductible and insurer itself. That gives you a much better idea of whether you found a bargain or just a smaller insurance policy.

What does “cheap car insurance” actually mean?

Most of the time it means the quoted premium is lower. That can be excellent news because no one wants to pay an unnecessarily high insurance bill.

But price alone doesn’t tell you how two policies compare. One quote might have lower liability limits. Another might have a higher Comprehensive or Collision deductible. Optional coverages can differ too.

The

National Association of Insurance Commissioners (NAIC) recommends requesting the same coverages and limits when shopping so you can compare quotes meaningfully.

 A cheaper policy can absolutely be a good policy. But you want to know whether it’s cheaper for comparable coverage.

Why can one car insurance quote be cheaper than another?

There are tons of legitimate reasons.

The coverage selections you make can change the price. A policy may cost less because it has lower coverage limits, a higher deductible or fewer optional coverages. 

Insurers can also arrive at different prices for the same shopper. That’s part of why comparing multiple quotes can be useful. It’s tempting to make a decision on price alone, but you should dig deeper.

When comparing quotes, look at:

• Liability coverage limits

• Comprehensive and Collision coverage

• Comprehensive and Collision deductibles

• Uninsured or underinsured motorist coverage

• Medical coverage where applicable

• Rental reimbursement, towing or other optional coverages

• The total premium

If quotes don’t contain matching coverages or limits, NAIC recommends asking for revised estimates that do. Most companies with good customer service will be happy to help you figure out what you need (HiRoad certainly does). So don’t be afraid to ask.

Is minimum car insurance coverage enough?

This is one of those things that you really have to decide for yourself, based on your unique needs. How much coverage makes sense depends on your vehicle, finances, risk tolerance and state requirements.

Minimum coverage does what the name says. It satisfies the minimum insurance requirements in your state. Those requirements vary, and the legal minimum may not be the amount or types of protection you personally want.

Liability coverage generally helps pay for injuries or property damage you cause to someone else, subject to the policy terms and limits. 

Coverage for damage to your own car works differently. For example, HiRoad Auto coverages include Comprehensive and Collision coverage for certain types of damage to your vehicle.

Can a higher deductible lower your car insurance price?

Generally, yes.

A deductible is the amount you’re responsible for toward a covered loss when that deductible applies. Choosing a higher deductible can lower the premium for the corresponding coverage.

For example, if you choose a $1,000 deductible instead of $500, your premium may be lower, but you’ll need to be comfortable paying that $1,000 if you have a covered claim where the deductible applies.

So it’s a tradeoff. You can often save a little with the higher deductible, but you don’t want it to be a higher number than you can comfortably get your hands on in an emergency. 

If deductibles are still confusing you, read our guide to car insurance deductibles.

How should you compare cheap car insurance quotes?

Start by making the quotes identical as you can. It’s like a science experiment. 

Use the same drivers, vehicles, liability limits, physical damage coverages, deductibles and optional coverages wherever possible. If the quotes don’t match, ask for revised estimates using the same selections.

The prices you see are probably going to drive a lot of your decision. However, look beyond the price.

You might care if a company supports certain causes you also support. Customer Care experiences might be a big thing for you. Maybe you’d appreciate having an app that can help you drive safer. 

You can also esearch whether an insurer is licensed and look at complaint and financial information. The NAIC Consumer Insurance Search can help you research insurance companies before you buy.

And if you’re feeling really spicy, there’s always Reddit reviews.

Does cheaper car insurance mean worse customer service?

Not necessarily.

A lower premium by itself doesn’t tell you how an insurer will handle a claim or what your service experience will be.

If service matters to you, research it directly. Look at complaint information and consider how you prefer to get help, whether that’s through an app, online tools, phone support or some combination.

That’ll tell you considerably more than trying to reverse-engineer customer service from a premium.

With HiRoad, customers can use the HiRoad app and contact Customer Care when they need help.

How can you save on car insurance without simply buying less?

Start by shopping around. A lot. 

Different insurers can offer different prices, which is why it helps to get comparable quotes and review them side by side.

You can also review your deductible and ask about discounts you qualify for (military vets, first responders, students, etc.). If you raise a deductible to lower your premium, make sure the new amount is one you could reasonably pay after a covered loss.

HiRoad takes another approach, too. Drive safely and log trips with the HiRoad app and you may be able to earn a Safe Driving Discount. We also have rewards for building good habits like driving without touching your phone.

Common questions about cheap car insurance

Is the cheapest car insurance always bad?

Nope. A lower-priced policy may provide exactly the coverage you want. Compare its coverage limits, deductibles and optional coverages with your other quotes before deciding whether the lower price is actually the better value.

Is the cheapest quote always the best deal?

No. Compare matching coverage and limits first. A lower premium can reflect a genuinely better price, but it can also reflect different coverage selections or a higher deductible. Every policy has its own recipe.

Does raising my deductible make my insurance cheaper?

Generally, yes. A higher deductible can lower the premium for the corresponding coverage, but it also increases the amount you’d be responsible for after a covered loss where that deductible applies.

How can I tell whether two car insurance quotes are really comparable?

Check the coverage types, limits and deductibles side by side. Also compare optional coverages such as rental reimbursement or towing. If the selections don’t match, request revised quotes using the same coverage choices.

How can I check an insurance company before buying?

Start with your state insurance department. You can also use the NAIC Consumer Insurance Search to research company information before choosing an insurer.

Ready to compare what your money gets you?

Compare the coverage, limits and deductible alongside the premium. Then get a HiRoad quote and see what your options could look like.

Coverage, rates, discounts, deductibles and eligibility vary by policy, state, driver and insurer. This article is for general informational purposes only and does not change or replace the terms of any insurance policy. Review policy documents and coverage details before making insurance decisions.