The Risks of Carrying Low Limits of Insurance
The question consumers often consider is whether or not they can afford a good insurance plan. That’s the wrong way to look at it. A better question to ask yourself is can you afford to NOT have a good insurance plan? That goes for life, health, auto, home, etc. Think of it this way. Let’s say you purchase a mediocre car insurance plan that costs just $50 per month instead of the better plan that costs $100 per month.
One evening, the road is slick and you accidentally slam into another vehicle, causing severe damage to your car, the other driver’s car, and even injuries to the other driver. Your insurance plan doesn’t cover enough to repair your vehicle, nor does it pay for the other driver’s medical expenses. You submit a claim to the insurance company realize you will be responsible for $5,000 in medical expenses and $5,000 to repair your own vehicle. That is what often happens when the insured carries low limits of insurance. So, now we have to ask again, can you afford to NOT have decent insurance?
Lenders May Require Better Coverage
The out-of-pocket expenses are greater when an accident occurs with low-limit insurance plans. However, the OOP expenses may not be the only thing you have to worry about. When purchasing a home or car, the lender will require you to purchase sufficient insurance. Mediocre insurance probably isn’t going to be enough to keep the lender off your back. As part of your agreement when obtaining a home or car loan, you will be required to carry the necessary insurance or potentially lose your car or home.
Insurance Should NOT Be Taken Lightly
Don’t make the mistake of purchasing just any insurance plan. This goes for all types of insurance. Insurance is valuable to everyone – regardless of your financial situation – but should not be taken lightly. When you purchase just any insurance plan, you put yourself and your family at risk for significant financial damage. When consumers cut corners to save a little bit of money, they often discover later on that your expenses are far greater with a dirt cheap insurance plan than a decent plan.
There are many high-quality insurance plans out there that cover everything you need at a price you can afford. Instead of cutting corners, we’d love to help you find an insurance that isn’t expensive but doesn’t leave you at risk.