Q: I have been shopping for car insurance and i got a very cheap motor insurance quote from a certain company. It was nearly half of what the next quote was. Is this likely to be a legitimate company?
A: A cheap motor insurance quote is one thing, but it is unlikely a company would be able to offer you one that was less than half of what their closest competitor could offer.
Car insurance is a highly competitive business and if a company could offer a policy for half of what their competition could offer they would quickly become the leader in the industry.
Car insurance companies collect money from their customers, pay out claims, and the rest is profit. By collecting half the money of the competition the company with the cheap rate would quickly reduce their profit margin to the point they would be losing money.
It is more likely that the company offering the cheap insurance is offering you their "come on" rate. This is designed to get you to their agent or web site where you will later find out the actual quote is much higher than the original quote.
Good for you for looking for a cheap motor insurance quote, but make sure the quote is verified and legit before making a decision on your coverage.
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