Benefits of No Deposit Car Insurance
One of the difficulties of getting auto insurance for some individuals is trying to come up with money to pay large down-payments. The reason why some insurance companies require deposits is that insurance policies are considered contracts, and contracts usually require deposits. In an effort to stay profitable in a competitive market, some insurance companies have implemented no deposit car insurance policies. Insurance policies that do not require deposits offer individuals greater financial flexibility. Instead of coming up with a large sum of money to procure an auto annual insurance policy, individuals are now able to break down their insurance bills into 12 monthly payments. Coverage starts when the first monthly payment is made.
Who is Able to Qualify?
Most drivers are able to qualify for car insurance that does not require up-front money. When you are searching for auto insurance, be sure to ask the company you are interested in if they offer such terms to their customers. There are plenty of insurance companies, big and small, who have implemented no deposit insurance policies. You can also go on the internet and look for companies that provide free quotes. The company will either give you a quote online or an agent will contact you. You can see online whether or not they offer the insurance plan you are looking for, or you can speak with the agent to discuss your options.
Advantages and Disadvantages
Individuals who are strapped for cash or have never owned car insurance find no deposit insurance policies very beneficial. It is also advantageous because it allows individuals to switch insurance companies in a relatively easy manner. However, it is not beneficial for everyone. Some car insurance companies simply spread the deposit over the 12-month period. Therefore, individuals who are able to purchase annual insurance policies may find themselves saving more money over the long-term.
Benefits for Young Drivers
Young drivers often incur the highest auto insurance bills. Insurance companies look at them as a risk because they are typically inexperienced drivers and more likely to be involved in auto accidents. No deposit car insurance allows people who are in the 17 to 25 year old age range to save substantially on insurance coverage for their vehicles. Another way for individuals to save even more money is to go for the no deposit insurance policies with high deductibles. A deductible is the amount of money you would have to come up with in the case of a claim before the insurance company financially covers you. Many people choose low deductible plans because they do not want to come up with the money to pay the higher deductibles. The problem with this for people who are financially strapped is that the insurance companies still raise rates for even the smallest claims. The high deductible will allow you to have lower monthly payments.
Cheap is Not Always Better
The popularity of no down-payment car insurance polices has caused many insurance companies to lower their prices to remain competitive. However, no matter how cheap the prices are, it is important to research the company before deciding to do business with them. The last thing you want to do is be involved with an company that gives you the run around when it comes to filing a claim. The internet is a great place to research companies. You are able to see if the insurance company you are interested in is listed with the Better Business Bureau. You can also read the reviews of other customers who are currently insured by the company, or were in the past. Although a large amount of negative reviews are a reason to be hesitant, it is important to realize that every company may have a negative review or two. Weigh all of your options before making your final decision.
National Companies Versus Local Companies
No deposit insurance was once limited to local insurance companies, but things have changed. Many national insurance companies now offer these plans. If you are looking for a reputable company with a national presence, there are many options for you to choose from. The advantage of national companies is that you are often able to keep your same coverage if you ever relocate. However, that is not to say that some local companies are not a great option for individuals. Regional or local companies often have less expensive policies than national companies. In most cases, you will deal directly with the insurance company and not just a broker. National and local companies both have their advantages and disadvantages. Take time to compare your options, and choose the one that best fits your needs.