Drawbacks of Cheap Car
In the UK, there is a
minimum insurance requirement. By law, all drivers must have a minimum
third party cover. Even this minimal cover does not protect the
policy holder at all if they were to be injured. It only covers the
other person. As risky as minimal cover is, many people will not stop
there. It is unfortunate, but many people want to cut insurance costs as
much as possible without thinking of the real-life consequences of doing
this. After weighing in, you may see that buying a better policy is
ultimately more cost-effective than cutting corners.
Many people who would easily question the reliability of a new cell
phone company will not apply the same logic to insurers. They are just a
business, and business is no mystery; if a company cannot pay its
financial obligations, it is considered to be a bankrupt, or insolvent,
company. Depending on the circumstances, and there are too many of them
to list, you may or may not be able to recover your premium pounds once
they have been spent. Remember, the policy is a contract. In the event
of a breach, on their end, you may still find that the legal issue of
recovering your money is not actually worth pursuing. It may end up
costing you more money than you stand to recover, even if you win! You
could always of courser buy short term insurance from
That is something to think about.
Signs of Company
Insolvency, or "Red Flags"
The largest, most
colossal, most exorbitantly capacious red-RED flag of an insurance quote
is the very thing you want to hear the most. Let's face it, "if it is
too good to be true" -- you know the rest. Look, insurers are in the
business of making money for the companies. How can they do that if a)
they pay out too many claims, or b) they fail to extract top dollar from
you? By all means, check out any good deals but be sensible about it.
You will rarely find the ideal, which is full, guaranteed protection for
almost no cost to you. Hint: this scenario would be the exact opposite
In a word, beware. Be wary of scammers who are running fraudulent
insurance companies online. They are the most likely to tell you exactly
what you want to hear. Remember that anyone can create a glossy-looking
website promising the moon for shoddy pounds. A more healthy approach to
dealing with the insurance industry is a sceptical one.
New insurers are more likely to fold than established companies. Find
out as much as you can about the company whose policy you like. Call
them and ask for a brochure. Sometimes you can download it from their
website. Sometimes these new companies are legitimate, but they have not
been around enough to be financially stable. It is a bit of a go-round
here. If the company offers you a better deal than the bigger guys, you
are more likely to invest your business with them. However, if they go
under, they may take your premiums with them.
The truth of it is that, with new companies, it boils down to sheer
luck! It is out of your control how many claims they can handle before
becoming insolvent. Reliable drivers who invest with them increase their
survival odds. Once they become established, they may decide to pull the
rug on all of those great deals they romanced you with in the beginning
years, and then you are right back where you started. Take heart; no one
ever claimed this was going to be easy.