Takeaways:
- You can save big and avoid falling into debt by avoiding common mistakes when buying car insurance and choosing your policy carefully.
- Don’t forget to ask about discounts. Take a look at our blog post on car insurance discounts that drivers overlook.
Avoid These 7 Mistakes When Buying Auto Insurance
If you’re in the market for car insurance, you probably have several questions about the process. Buying insurance can be a complicated undertaking. Fortunately, there are experts to help you avoid common mistakes. Here are seven things people tend to mess up when they’re purchasing car insurance:
1. Buying Only the Minimum Amount of Coverage Required
It’s illegal in most states to drive without car insurance, but each state has its own requirements about how much insurance drivers must carry. You can find your state’s car insurance requirements at the state commissioner’s website. Many people choose to buy only the minimum required amount of coverage in order to keep their premiums low. However, if you hit and cause damage to an expensive car, your minimum coverage probably won’t be enough to cover the other driver’s repairs.
Purchasing the minimum coverage might lead to overwhelming debt if you hit an expensive vehicle or cause severe injuries.
2. Not Buying the Additional Coverage You Need
When drivers purchase only the minimum insurance required by the state, they often ignore add-on coverage entirely. It’s important that you speak with your insurance agent about add-on policies like rental car insurance, collision coverage, and comprehensive car insurance. These types of add-on policies will cause your premiums to rise but may allow you to retain your financial footing after a serious collision.
3. Not Shopping Around for the Best Deal
All insurance policies are not created equal, and it’s important that you gather as much information as possible before you purchase coverage. Meet with several different insurance agents to get the best quote on your coverage.
4. Buying the Wrong Type of Insurance for Your Needs
While many people buy too little car insurance for their needs, even more people purchase car insurance that doesn’t make sense for them. You may think that sending a check to your car insurance company covers you in any situation, but that’s far from the truth. Speak with insurance agents from several different companies to make sure you’re getting the coverage that makes the most sense for you.
5. Paying Too Much
Insurance is supposed to save you money, not add to your debt. If your premiums are difficult to keep up with, it might be time to rethink your insurance.
6. Choosing Insurance With a Deductible That’s Too Low
Most people like to keep their out-of-pocket costs as low as possible, especially during a serious medical emergency like a car crash. However, if you’re a safe driver with a clean driving record, you may be wasting money on low deductibles with high monthly premiums. Increasing your deductible from, say, $300 to $1,500 could lower your premiums dramatically.
7. Not Understanding How Much Coverage You Already Have
Car insurance can be confusing. That’s why it’s’ essential that you consult an expert you can trust. Reach out to your insurance agent as soon as possible to discuss your current car insurance coverage and how you may be able to protect yourself or save money.