Especially since so many people have started buying car insurance on the Internet, a whole array of “nonstandard” insure policy options have sprung up for people to choose from. At first glance, these policies seem like a great way to go because of their low premiums, especially for those who have a tight household budget. However, what many drivers are not aware of is the hidden costs that can sometimes come with these nonstandard policies and which can hit them hard in the pocketbooks. Read on to find out more about some of these hidden costs.
While getting a great deal on discount auto insurance might sounds like a dream come true, it is better to read the fine print carefully – especially in a household with teenagers or pre-teens. Some low-cost insurance policies (also called non-standard policies) will not cover certain things, such as underage drivers. This means that if a sixteen-year-old gets into a fender-bender, parents might have to take care of the damages out of their own pockets.
Generally, standard insurance providers will do a record check annually to determine if the policy holder has been ticketed or had any other driving issues. However, nonstandard insurance policies often perform this check several times a year or more. And while the initial check might be at a low price, the ones that follow will be more expensive. The fees for these record checks can then add up in a hurry.
There are many added benefits and opportunities that are part of standard car insurance policies which non-standard policies simply do not cover. Such benefits include things like roadside assistance in case of breakdown, diminishing deductibles for staying with the same insurer or other extended benefits. Such “extras” are generally not available with low-cost policies – which is one of the reasons why they are so low in cost! Another thing to keep in mind is that if a driver is in an accident and it is his or her fault, the nonstandard coverage will generally not cover this at all.
Many nonstandard carriers – and even some standard ones – will charge what is called an “installment fee” if the policy holder opts to break up their premiums into monthly installments rather than paying in an annual or semi-annual lump sum. Not all policies do this, however. And no matter what kind of policy a driver has, it is good to ask about whether or not installment fees are charged.
In short, drivers would do well to understand just what is and is not covered by these “nonstandard policies” and what hidden charges, like record check fees, can make this kind of insurance more expensive than a standard policy. Steering clear of such policies – or understanding exactly what is being offered before signing – are thus very good ideas indeed.