Why the cheap insurance offered by the dependent company might not be less expensive

You are aware of the auto insurance companies that advertise their affordable rates on radio, television, and social media on a national scale. They sincerely want you to internalize their messages.

However, the reality is that there might be a misunderstanding as to what they actually mean.

“Replace your current coverage with ours,” they proclaim, “and you’ll find savings on your auto insurance!” Or “We’ll present you with a lower price than the competition if you give us ten minutes.”

The truth is that switching to a direct insurance company won’t result in any savings for the majority of car owners. This is so because no dependent company has the resources to provide coverage other than what they already provide. A low quote may appear appealing, but it may be hiding a higher insurance deductible and less liability insurance.

We present to you this true story about a person who chose to trust an independent agency’s ability to find him customized auto insurance in order to emphasize this crucial lesson.

A driver who had previously obtained insurance from one of these heavily publicized dependent companies that advertise “cheaper rates” made the decision to work with an independent agency known for their superior customer service.

The insurance professional found some significant coverage gaps after reviewing this man’s ‘cheap’ auto policy. She went to work, looking through the various policies offered through the network of providers her company works with, realizing this could result in serious issues if the insured were ever involved in a car accident. She identified a great plan with a low competitive rate that filled in the gaps.

The customer was pleased with the discovery and left with renewed peace of mind as a result of his new insurance.

As luck would have it, this insured was involved in a car accident shortly after that, causing his car to be declared a total loss. It was assumed that since the other driver was at fault in the collision, their insurance provider would cover the expenses.

But this had one significant drawback. The amount that the other insurance company proposed to pay was significantly less than what the totaled car was actually worth.

The newly insured person decided to call his new company at that point after realizing his car was totaled. He had no hassles or issues with the insurance company. Instead, they sent him a check in the mail for $3,000 more than the at-fault driver’s insurance company offered, which accurately reflected the value of his vehicle.

If that “cheap premium” policy with coverage gaps had been in place, there is no doubt that the happy ending to this real-life story would have been very different.

Now, you decide if that “cheap” policy is actually “cheap.”

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