Keep away from These 10 Most Widespread Errors When Shopping for Automotive Insurance – MarketWatch
Of course, it is the biggest mistake you can make in car insurance if you don't have insurance coverage. Also, buying the first insurance policy you come across is not the best decision either.
Since buying a car is considered a big purchase, it is not advisable to leave such a large investment unprotected. In addition, auto insurance is mandatory in all states except New Hampshire and Virginia, and you risk hefty fines and, in some places, jail times if you don't have auto insurance.
So that you don't make the same mistakes, check out these mistakes people make when purchasing auto insurance.
Common Car Insurance Mistakes That You Should Avoid
Check out these mistakes people make when buying auto insurance and learn how to avoid these pitfalls.
You do not know what insurance coverage you need
Don't compare insurance
Don't tell the truth when applying for auto insurance
Forgot to update your insurance policy
Choosing the wrong deductible
Do not research car insurance online
Buy only the minimum insurance coverage
Buying an excess cover
Don't ask questions
Not looking for discounts on car insurance
1. You do not know what insurance coverage you need
Every state has its minimum insurance requirements, but you shouldn't base your decision on them alone. Each person has a unique need for protection that depends on many other factors, including:
Vehicle type and model
Price of the vehicle
Experience behind the wheel
How much do you drive
Driving and weather conditions in your residential and commuter area
Of course, everyone wants full coverage. Even so, it is usually quite expensive. So your best bet is to find the right balance between cost and coverage. If you are not sure which type of insurance you need – whether fully comprehensive, collision, personal injury protection or something else – you can always contact an insurance agent or read the KBB guide to taking out car insurance.
2. Don't compare insurance companies
People usually compare the prices of retail goods with every purchase. You should use the same principle when getting auto insurance to increase your chances of getting a good deal.
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So always try to get at least several quotes from different companies when buying car insurance. Example: State Farm
and others usually offer lower insurance rates for good drivers. However, if your driving report includes accidents or speeding violations, you may need to look around to determine the best and cheapest option for you.
3. Don't tell the truth about a car insurance application
Lying is probably the worst thing you can do while completing your auto insurance application or claim. Insurance companies access driving records and other personal data and can easily spot discrepancies. On this basis, they can refuse your insurance and reject your application. But that's not the greatest danger.
If an accident happens and they discover that you lied, they can refuse to pay your claim and cancel your policy. Also, if they see a cancellation on their records, many companies are unwilling to insure you. So be completely open about your driving habits and the condition and value of your car.
4. Forget to update your insurance policy
While forgetting isn't the same thing as lying, it's one of the most common mistakes in auto insurance and some insurance companies treat both of them the same way. For example, if you don't add your teenage driver to your existing policy but let them drive your car, you can face some pretty dire consequences.
However, updating your policy isn't always bad. If you get married or move to a safer neighborhood, your insurance premiums will likely go down.
5. Choosing the wrong deductible
The deductible is an important part of your car insurance. In general, a lower deductible means a higher insurance price but lower own costs in the event of an accident. A higher deductible, on the other hand, saves money on your policy, but incurs more costs in the event of an accident.
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6. No online research for car insurance
One of the best ways to buy car insurance is through online comparison sites. Everyone is online these days and businesses have to adapt. You can even compare car loans if you want.
There are many online platforms where you can get multiple insurance quotes after completing a single application, which doesn't take much time when you have all the necessary documentation on hand. Keep in mind that some of these sites provide estimates while others provide real quotes. In both cases, however, you can get a pretty good overview of the current tariffs.
Also, most insurance companies have quotes on their own websites so that you can do so instead of going to an office or calling.
7. Buy only the minimum insurance coverage
It can be tempting to only take out minimum coverage. But that's not always very wise. That is why it is the list of the most common mistakes in auto insurance. In almost 100% of the cases, a minimum coverage is by no means sufficient.
As a rule, you need liability insurance that does not actually protect you, but above all the other person you are colliding with. In addition, the limits of liability are typically low, which leaves room for the other person to sue you for much more than is covered by your policy.
Even if you drive an expensive vehicle, it is good to consider both collision and fully comprehensive insurance. Otherwise, you risk a major financial loss in an accident or theft of your car.
Cashbox: Cars that cost more than $ 200,000
8. Buy excessive coverage
It is possible to buy too much coverage just as you can buy too little. For example, if you have an older vehicle, it doesn't make sense to take out an expensive policy or comprehensive insurance. Aggressive advertising shouldn't change your mind.
In addition, you shouldn't usually pay more than 1/10 of the value of your car to the insurance company.
And if you can't find a policy at a good price, it may be time to look for a new vehicle.
9. Don't ask questions
Whether you get auto insurance through a broker or a specific company, always ask questions when something is not clear. Agents and companies often use fancy words and industry jargon to distract you and seal the deal. But if you don't understand a term or what they're trying to say, have them pause and explain.
While you may think you seem rude or silly, it doesn't. After all, it's their job to help customers make informed decisions and educate them. There is nothing to worry about.
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10. Don't look for car insurance discounts
Last but not least, you can always save well by looking for discounts on car insurance. This is one of the most common mistakes in auto insurance as these can be updated annually and sometimes it is not asked.
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There are some popular ways to save, such as: B. to bundle your home and car insurance with the same company or to insure several cars with the same provider. There are many other discounts available.
You can always ask the insurance company what types of discounts they offer. For example, a good student discount or discounts on safety equipment may be available. You can also save money with an Affinity membership with AAA or a similar organization.
This story originally ran on KBB.com.