We all want to save money with discount car insurance. Expenses in all areas of our lives are getting out of hand. Everywhere we can trim a few bucks is money that can go for other purposes. My caution is make sure that certain things are included in your online car insurance policy, before you drop your existing coverage for budget car insurance.

You have general protections.

Let’s face it, all car insurance companies are regulated. They must have adequate reserves to cover losses. They must operate within guidelines set up by laws that protect the consumer. They must be responsible to their shareholders and not operate in a manner that would jeopardize the company’s value.  These protections are similar across the board between the larger insurers and the smaller discount car insurance companies. Where they differ is the types of coverage offered and the policy restrictions.

Here are a few “Fine Print” items to check out:

Does the insurer allow your repair shop to use OEM parts? OEM (original equipment manufacturer) parts are most often guaranteed by the auto manufacturer.  Aftermarket parts can be cheap imports from who knows where? Will the discount car insurance company stand by those parts, if they won’t allow OEM? Some do, but most ask you if you’ve read the fine print in your car insurance policy. After grabbing your magnifying glass, you may discover that in the smallest print still legible, you are stuck if the aftermarket parts fail. Many large companies offer discount car insurance, too, and use the same tactics.  It’s just something to be aware of, so you can decide whether the money you save is worth it.

Does the fine print allow you the right to sue?

Retaining the right to sue is very important. Many discount car insurance policies force you to go to binding arbitration, if there is a dispute between you and the insurer. I don’t care to put my fate into the hands of arbitration. You never know how that will turn out. Many times, it depends on the whims of the person in charge.  I’d rather take my chances in court, where the law is clear and you have the opportunity to appeal if the outcome is in favor of the discount car insurance company. With binding arbitration, the decision is final and you live with it.

These are just a few of the areas to check on when buying cheap car insurance online. A very attractive quote may turn around and bite you, so don’t cancel your old car insurance policy until you are sure the new insurer meets your needs.