Ten Mistakes To Avoid When Buying Car Insurance

10 Mistakes to avoid when buying car insurance

Car insurance is one of those things that sit in the backs of our minds. It’s rarely something we think or talk about with friends unless we’re in the midst of buying a new car, shopping for a new car insurance policy or getting ready to pay our biannual car insurance bills. But when something happens, it’s important. And the last thing you want to be doing after a car crash or accident is kicking yourself for not getting the right policy. Here are 10 mistakes to avoid when shopping for a car insurance policy.

Mistake 1: Failing to purchase underinsured or uninsured motorist coverage

Though drivers in the United States are required by law to carry liability insurance, many don’t or carry inadequate policies. It’s important for you to have insurance that will take care of you and your family in the event of a collision with an uninsured motorist. Most policies covering collisions with uninsured and underinsured motorists are inexpensive, costing only 7 to 10 percent of the total premium.

Mistake 2:  Not getting enough coverage

Car insurance can be expensive. In these tough economic times, it’s hard to pay for something you hope never to use. For that reason, many people opt for the least expensive policies. But if they are ever involved in a crash, the weak coverage could end up costing them.

Mistake 3: Allowing your credit rating to slip

Insurance companies typically use credit scores to evaluate the risk of a particular driver and charge much higher rates to those drivers with poor credit ratings than to those with healthy ones.

Mistake 4: Not bundling home and car insurance

Insurance companies offer big discounts to drivers who carry homeowners or renters insurance policies with them.

Mistake 5: Failing to disclose previous accidents, tickets or claims

If insurers find out you have lied about your driving history, they can deny you coverage or raise your premiums.

Mistake 6: Opting for a low deductible

If you could afford it, even if it would be a stretch, it pays to have a high deductible. Premiums drop significantly, the higher the deductible is.

Mistake 7: Buying the wrong car

Some cars cost significantly more to insure than others, and not just because they are more expensive. Drivers should check with their car insurance providers to find out what annual premiums will be for different makes and models.

Mistake 8: Paying monthly premiums

While that one-time price seems super steep, paying for your car insurance once or twice a year saves drivers an average of one or two months worth of premiums.

Mistake 9: Not getting a new quote every year

Shopping for car insurance is a hassle and about as fun as looking for a new dentist, but it has to be done. Insurance companies tend to raise premiums on existing customers every year while offering incentives and low-cost coverage to new clients. If you’re really happy with your coverage, finding a cheaper policy somewhere else could give you a starting point for negotiating with your current provider.

Mistake 10: Failing to ask about other discounts

It pays to have a conversation with your insurance agent and ask them to research all existing discounts and if you qualify for any of them. In most cases, you will only get what you ask for.