The Problem with Discount Auto Insurance Companies

The rising number of vehicles on US roads and highways has led to an influx of new auto insurance companies making a breakthrough into the existing marketplace by offering coverage at discount prices. Although these new carriers have a tendency to make some very appealing promises, many consumers have already found out, to their cost, that opting for a non-specialist carrier can eventually end up costing more in the longer term. There are a number of perils that are commonly associated with discount auto insurance companies:

  • Discount auto insurance companies may not be licensed to operate within your own US state. This could leave you insufficiently covered or unable to make a claim if you are ever involved in a road traffic accident
  • Many discount auto insurance companies promise cheaper car insurance rates but the product being sold is usually inferior when it comes to levels of coverage. Often, you’ll actually find your paying good money for little more than a basic policy
  • Many of the new discount auto insurance companies who have arrived online within the last couple of years have very little experience in handling claims or delivering good levels of service because they are unfamiliar with the marketplace. This can lead to immense frustration when a claim is finally made
  • With no reputation to preserve, discount auto insurance companies can quickly become a ‘Here Today – Gone Tomorrow’ operation. Many consumers have already had to endure the financial hardship of purchasing a second policy because their chosen discount auto insurance carrier has fallen on hard times