There is no doubt that encountering a cheap car insurance quote is a dream come true in these modern times. Thanks to the power of the Internet, comparing and contrasting different providers has never been easier. However, is there more than meets the eye in terms of car insurance? In other words, are these plans really cheaper than the prices that we would have encountered a decade in the past? This is an important question, for these packages are essential to keep us safe and secure while on the motorway. Let's take a closer look.
More Than the Basics
We should first realise that many modern car insurance comparison sites only quote what can be considered the bare minimum in terms of coverage levels. This is generally known as third-party liability. Although liability required to operate a motor vehicle, the fact of the matter is that the majority of drivers need packages that are much more comprehensive. So, the quotes provided may not reflect the amount of money that will realistically be spent in the long run.
Hiding the Best Deals?
Some analysts have even pointed out that certain comparison sites purposely hide the best deals from their customers; instead only displaying the options that will earn the highest amount of commission per click. These tariffs can cost a household a great deal of money and yet, they are presented in such a way as to make the individual believe that he or she is getting the best bargain. Some sites may also "assume" certain details in regards to the driver; hence limiting the options that are being offered.
Have Rates Really Dropped?
Many insurers boast the ability to offer highly
competitive rates while still adhering to the needs of the driver.
This has led some to believe that the premiums themselves have
lowered over the years. Although various sources have pointed out
that rates fell for a short period of time (1), this had more to do
with a ban on referral fees rather than the prices of the premiums
themselves falling. We also need to take into account the number of
accident claims filed each year.
Profiting From Competitive Rates?
Whilst there is no doubt that premiums are on
the rise, they are still far away from the charges incurred between
2010 and 2012. So, many of us are left wondering how insurers
continue to turn a profit. The most sensible observation is that
most offer "add-ons" which are sold to the client alongside a basic
package. Thus, higher fees are the end result even if the consumer
believes that he or she is purchasing a basic plan. It is also wise
to point out that since the rise of the Internet, most insurers now
have access to a much wider audience. Hence, they are able to
generate higher profits from sheer sales volume.
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