12 Auto Insurance Purchasing Mistakes and How to Avoid Them

Nobody likes insurance, but it’s a must if you want to protect yourself on the road. You can’t afford to pay for medical and vehicle issues when they cost so much. However, you can’t just purchase any insurance policy you find.

This is even more important as insurance rates are on the rise. You need to make sure you get enough value for your money.

You must avoid the typical auto insurance purchasing mistakes if you want proper coverage for your car. Below are 12 of the most common mistakes people make when asking for auto insurance quotes.

1. Not Getting Multiple Quotes

Shopping for insurance isn’t fun for most people. In most cases, people call the first insurance provider they hear about to get a quote. Unfortunately, that’s where a lot of people stop.

While there may not be many variations in your insurance quotes, that doesn’t mean you can’t find savings. You’ll never know what savings you’ll see by shopping around for your options for auto insurance.

Try to get quotes from at least three companies before choosing. Ideally, reach out to as many insurance companies as possible to make comparing insurance costs easier.

2. Only Buying the Minimum Policy

Yes, car insurance can get expensive. You don’t want to throw away a lot of your monthly paycheck for the off-chance you get in the wreck. The problem is that you may end up without enough coverage if you buy the minimum amount of protection for insurance.

Make sure you completely understand your needs when buying insurance and purchase what you need. This is especially important if you don’t have a car payment and don’t need full coverage. The extra coverage you get by paying a little more is well worth it when you need to use insurance in the future.

3. Getting a Low Deductible

It’s tempting for many people to get a plan with a low deductible. They do this because they’ll save money in the event of a crash. You won’t need to pay as much since you don’t have a high deductible plan.

However, you pay for this with an increased insurance rate. Unless you’re constantly getting into crashes, you’ll probably lose money with the extra money you pay every month.

Try not to get the lowest deductible you can. You will likely save more money when you get into a crash and can still take advantage of your insurance plan.

4. Ignoring an Insurance Company’s Reputation

There are many more insurance companies than the big ones people think of the most. Most of them do a great job providing car insurance to their customers. However, not every company does things the right way.

Many companies take advantage of people to charge them insurance premiums and not pay out when they get into a car accident. Luckily, people are more than willing to talk about these bad experiences on the internet.

Ensure you investigate an unknown company’s reputation online before signing up for an insurance plan. You don’t want to find out when it matters the most that a company can’t meet your needs.

5. Not Paying Yearly

Shopping around for insurance plans isn’t the only way to get a great deal on car insurance. You may find that you need to pay a little more to get the coverage you need. However, you can save on your payments by not paying every month.

Many insurance companies allow you to make a single payment every year for your insurance premium. Providers offer a significant discount if you go this route. If you have the money, it’s a great way to save money every year.

6. Ignoring Customer Service

You don’t want to be stuck on hold and dealing with unreasonable people when dealing with a car accident. In some cases, you’ll get injured and have enough stress already. You don’t want the company tasked with helping you through the process adding more stress to your life.

Customer service is critical for a car insurance company. Examine how well the people you speak with at a company answer your questions and satisfy your needs. You’ll also need to examine a company’s customer service history to ensure the service you get before signing up is the service you’ll get after you give an insurance company your money.

7. Don’t Skim Your Policy

Yes, it’s not fun to read pages of legal documents when you’re shopping for car insurance. Unfortunately, there may be hidden terms in your insurance policy that you won’t learn about until it’s too late.

Make sure you understand precisely what’s in your policy before you sign up. You may think you’re getting coverage for one thing but not end up with it in your policy. Do everything you can to learn about insurance policies to ensure you have the knowledge to understand the paperwork.

When you come into the process with that knowledge, you’re more likely to find issues that make a policy not worth buying.

8. Not Having Accurate Information

Your insurance rates are based on the information you give an insurer. They will develop a risk profile based on that information and price your policy based on that.

Some people try to obscure information in the hope that it gives them a better rate. Doing this isn’t a good idea.

You can get into serious trouble if you go this route, even if you do it by accident. Make sure you have accurate and up-to-date information when you speak with insurers. You’ll end up in a bad situation in the future if your insurer finds out that you provided the wrong information.

9. Don’t Buy With an Insurance Gap

An insurance gap is a bad thing to have when shopping for insurance. There’s no guarantee that something happened to your car between your gap period. Because of that, insurance companies may scrutinize your vehicle history more.

In many cases, you’ll need to get a vehicle inspection before signing up for a policy. This is necessary to prevent you from making claims on existing issues that happened during your gap period.

On top of that, some insurers will charge a bigger premium if you have a gap in your insurance history. Because of that, don’t cancel your current policy before you have no insurance lined up.

10. Not Listing All Drivers

You’re only purchasing insurance for yourself in many cases. You don’t have any additional requirements in this situation. However, that will change if you plan on other people driving your cars.

Many people lend their cars to their family and friends. This sounds harmless in theory. But it can be a headache if an accident happens and the other driver isn’t listed on your policy.

Remember to tell your insurance company who the other people are who will drive your car. You may get a higher premium, but you can be sure that you’ll get an insurance payout in cases of an accident.

11. Sticking With One Company for Too Long

Many people find a great insurance provider and stick with them. While nothing is wrong with this, you need to be careful about your provider gradually raising their rates.

Insurance companies often raise your premium every year. A few dollars every year may not seem like much, but it adds up over time. This is even more important in a world where prices for everything are rising constantly.

Don’t hesitate to shop around in the future if you notice your insurance premium is getting too high. You can usually find better rates from other auto insurance experts and drastically reduce your insurance costs.

12. Not Updating Life Events

Insurance companies consider more than your history when calculating your rates. Take marriage, for instance. Some insurers will reduce your rates when you get married.

Another example is a big move. Crime may be less of an issue in your new location, leading to lower insurance rates.

Always keep this information updated to ensure you get the best rates.

Don’t Fall Victim to Common Auto Insurance Purchasing Mistakes

You rely on your car insurance to come through when you suffer from an accident on the road. Unfortunately, you may find out too late that your auto insurance policy won’t cover all your needs.

You need to do your due diligence during your search to avoid making auto insurance purchasing mistakes. Remember the errors above to ensure you find the perfect insurance policy for your needs.

Check out the blog for other guides that will help you make other important decisions.

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