Car insurance is one of those things we purchase hoping never to use. It is mandatory and it is not an option not to have it. As an owner of a car, you know the drill-renew your insurance yearly, handle the paperwork, and hope that the premium does not shoot up. What if you were told there was an alternative, such as long-term auto insurance, which is a policy that lasts more than one year?
The burning question now: Is long term car insurance all worth a dime? Let’s find out.
What is Long-Term Car Insurance?
In simple terms, car insurance long term means buying coverage for a longer period, typically 2 to 3 years, rather than renewing each year. It has been made to give you convenience and sometimes, monetary benefits.
Such policies lock your coverage for a few years in one go instead of worrying about raising the premiums every year or forgetting to renew the coverage on time. But not everything is sunshine and savings.
Benefits: More Than Just Convenience
Protection Against Premium Increases
Generally, car insurance policy rates go up from the previous year. Long-term coverage locks in your premium away from annual increases, which can translate into substantial savings in time.
No More Annual Renewals
We all forget things-deadlines, birthdays, and even renewals of insurance. And the last thing one wants is to stay exposed on the road due to failure to renew the policy on time. This hassle gets out of the way by getting a long-term policy, thus providing continuous coverage.
Discounts Available
Most insurance companies offer discounts for long-term car insurance since they prefer to commit to a customer for a longer term. Such discounts make the long-term policy more cost-effective than annual renewals.
Avoiding Policy Lapses
Ever had that mini heart attack when you suddenly realized your insurance expired last week? You would prevent that sort of thing by obtaining long-term car insurance as you are legally covered at all times.
The Downsides: What You Need to Consider
Upfront costs
Paying for several years at once tends to result in higher lump sums than paying on an annual basis. In the long run, it proves cheaper; however, not everyone is willing to release a huge lump sum at once.
Limited flexibility
In the event that the car is resold or changed to a new insurer, it may not necessarily be easily transferable or refundable as not all of the long-term policies offer such features.
Missed Out New Benefits
As the insurance policies change, there may be some newly included features or offers that you won’t be able to avail of because of a multi-year policy. An annual renewal might help you grab some of those better deals.
Is This Worth It?
For you, if it is just the pure effect of convenience, a promise of savings, and coverage against the rising costs of premiums, long-term car insurance might be the perfect solution. But if you want the option of changing insurers frequently, annual renewals would suit you best.
At the end of the day, your budget, your mode of transportation, and how much you value hassle-free insurance are all important considerations. Subscribe for the long haul, drive carefully, and make informed choices!