Cheap auto insurance … may not be so cheap.

As insurance agents selling auto insurance we know that many consumers are looking to buy cheap auto insurance. It’s not that consumers want their auto insurance to be “cheap,” it’s that they want it to be affordable. This totally makes sense.

Insurance agents have the responsibility to advise and consent on the real “value” of the insurance products being sold, so we feel a bit compelled to challenge this notion of cheap auto insurance. None of us should want “cheap” anything.

What does cheap auto insurance mean?

Let’s first normalize the phrase, cheap auto insurance. To do so, we need to turn to the Merriam-Webster dictionary, and define our terms so we can put into perspective why this is important.

It is our belief that consumers want the primary definition shown as 1a above. This makes the most sense. However, there is another way to define cheap, and that is contained in 3a above, and that is an entirely different animal.

Consumer don’t want cheap auto insurance that is “of inferior quality or worth,” but that is exactly what can happen when you look for cheap auto insurance.

Inferior quality or worth is not good auto insurance

The reason why we bring this up is because there is a form of auto insurance that is explicitly created to provide less coverage and/or protection. This form of auto insurance is often referred to as nonstandard. Nonstandard auto insurance is not likely what you set out to purchase when you began shopping for auto insurance, when you typed those words, “cheap auto insurance” into Google.

It’s not that nonstandard auto insurance is “bad,” it does have it’s place and purpose, but the reason it exists is to provide less coverage, less service, more exclusions and rules that restrict the delivery of benefits. This, in theory, keeps the prices down and makes the product easier for lower income, or harder to insure individuals to purchase auto insurance.

Sure, these types of auto insurance policies will provide the basic benefits, but they may drop you into a trap, and afford no coverage if you didn’t read all the fine print.

So, similar to consumer packaged good, like a computer, cell phone, or furniture, the better the craftsmanship, materials, and services provided, the higher the price. This is true for auto insurance too. You really can’t get a BMW for the same price as a Kia, all things being equal.

The same is true for auto insurance.

Do your homework and buy the right auto insurance

When you begin the process to buy auto insurance, to compare auto insurance quotes, and to purchase a new auto insurance policy. Keep in mind that an unreasonable low price may not be the real value you intended based on your definition of cheap auto insurance.

Not all auto insurance companies are made equal and they don’t all design coverage and policy language the same, so ask your insurance agent and make an informed decision before you buy auto insurance.