During these years, low-cost products or services have proliferated in many sectors: flights, gas stations, hotels, telephone operators, etc. Presuming how much a product or service cost us went down in history and companies know it; consequently, they have done everything possible to bring low cost products to the market.
They are some of the popular phrases that are heard when someone presumes to have found a good price for any product. But it is not always right to say it and the crisis has shown that it is often possible to adjust the family budget without losing too many benefits.
Now the tendency to squeeze the margins to make the goods affordable to the consumer comes to the world of insurance: we are in the age of 'low cost insurance', which reach the car and the home. How can you offer such cheap products? Are these policies worse than the traditional ones?
The price offered by insurers 'low cost' can be half that of the traditional ones. The question is how can these companies make money and at the same time offer adequate services to their customers. One of the keys is that they operate through the telephone and the Internet, which saves the wide network of offices, commercial, intermediaries and vendors that the other companies do. This supposes a remarkable saving in costs.
In addition, they usually offer discounts to those who sign up online instead of using the telephone, because in this way all the work is done by the insured and, once again, staff costs are saved. People self-manage their insurance. There are those who value direct contact, personal treatment, the advice of an expert, the security of being able to go to the office to claim or consult. But it is also true that many customers, especially the youngest, are already used to doing everything online and for them, fundamentally, these products are designed.
Sometimes, it is a bit of a hassle to take out insurance with unknown, new companies that seem to have little experience in the face of the popularity of the big insurers. The truth is that many of these low-priced companies have the support of leading groups in the insurance market.
In practice, traditional insurers and 'low cost' offer the same coverage’s in their insurance. The question is how far that coverage comes. It is common that in the contract they sign with the client, the low cost companies reduce considerably the amount of compensation. When the loss is serious, the money paid for disability or death of the driver or for health care is very small compared to that offered by more expensive policies.
The same applies to the amount of legal defense or services that includes roadside assistance. In case of a serious accident, the owner of the vehicle will have to take care of expenses, which can be very high. And the same happens with the rest of the coverage’s. Therefore, it is always advisable to read the small print of the insurance to avoid negative surprises in the event of a loss.
The good thing about low cost insurance is that they are more flexible; the owner of the vehicle can shed the covers that he considers superfluous and that he probably will not use. There are very basic insurance with which the client simply seeks to comply with the law. If you live in a small city and do not use the vehicle to travel long distances, you can probably do without services such as roadside assistance.
If you consider that your use of the car is very unlikely to have a serious accident, it may not be necessary to pay too much for a policy with extra coverage for the driver. That is, there are those who only need compulsory insurance and, in this case, $20 down payment car insurance policy can be very helpful. If, in addition, the owner of the vehicle is accustomed to carrying out procedures through the Internet and does not give special importance to personal treatment, the low cost is his insurance.
Although it may seem like a paradox, low cost insurance may be worth more than the one contracted with other companies. When the client adds coverage or wants to obtain the same compensation as in traditional companies, the price of the low cost may be higher.
It is also convenient to compare what each insurance offers the first year with the following ones, since it is possible that in the long term it would be better to contract with a conventional insurer.