Car Insurance

Top Reasons Why Getting Cheap Car Insurance is a Complete Bad Idea in Nigeria

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  • Cheap car insurance might seem like a good deal but it will come back to haunt you in the long run.
  • This article highlights some of the problems associated with getting a cheap car insurnace in Nigeria.

We all like to get the most value for our money. That’s why we strive to find cheap auto insurance rates that still fit the level of coverage we want. It is also a common secret that the insurer and vehicle owner know everyone is looking for a deal. To entice customers to sign up, insurers in Nigeria promote cheap auto insurance rates. 

However, if you are involved in an accident, cheap car insurance could come with heavy out-of-pocket costs for car repairs or medical expenses. With better information, that cheap rate is suddenly not the great deal you presumed it was.

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Given that you must have car insurance to protect your finances whenever you drive, let’s look at several shortcomings of a cheap insurance rate.

What are the Disadvantages of a Cheap Insurance Premium?

While some more affordable insurance rates can be a good idea, knowing the potential consequences of the cheaper rates is essential. Exceptionally cheap auto insurance should serve as a reminder of this basic truth: “You get what you pay for.” Having said that, all driver’s car insurance premiums vary, and your budget and level of risk tolerance will determine how much coverage you require.

For this reason alone, it is advisable to work with an insurance provider to explore what level of coverage is sensible for your lifestyle and financial position.

Here are the disadvantages of getting a cheap insurance premium:

  1. You Could End Up Paying More Out of Pocket With a Cheap Auto Insurance Rate

Opting for a lower premium automatically means that some critical risks have little to no coverage. This means more out-of-pocket costs when you are found at fault for anything the policy doesn’t cover.

Nothing is a simple incident when you have inadequate cover with huge deductibles or have to pay actual cash, even on a minor incident. The medical bills and cost of repairs can quickly also go into the tens, even hundreds of thousands. The penalties alone can cause financial distress. It’s better to pay for insurance and not have to find out. 

  1. You Will Be Taking More Risk

One of the most popular ways to reduce insurance premiums is to raise the deductible. Such cheap insurance rates push a lot of the liability to the policyholder and mean the driver has to pay a significant amount of cash upfront before the coverage begins.

This means that you would be in a severe problem or risk your investments and savings at risk. Your property and assets can be seized to compensate the accident victims or pay any damages caused. 

  1. Cheap Insurance is Less Personalized

Most cheap insurance rates come as a fixed package with little flexibility on the types of coverage. However, an insurance broker can help you cherry-pick your preferred coverages with a reasonable insurance budget. 

This is possibly one of the best ways to make up a policy with endorsements and add-ons that suit your lifestyle. For instance, a water damage clause can help you recover when a disaster strikes.

Conclusion

Having car insurance is good. But having a cheap one could cost you seriously in the long run. As such, if you can, get an insurance with better coverage. You’ll ber grateful you did.

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