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5 Common Car Insurance Mistakes You Should Avoid

Common and most painful car insurance mistakes to avoid

Would you like to know what the biggest car insurance mistakes are and how to avoid them completely? The errors if made can shatter everything for the policyholder.

Nobody is excited buying an auto insurance policy, it’s like throwing away a substantial amount of money until there’s need for an insurance company to take off a burden from you.

That’s why it’s very important to consider every detail and option involved in choosing the right policy. That way you are sure that your money is saved for uncertainties rather than wasted.

Below are 5 painful car insurance mistakes you should avoid at all costs when buying an auto insurance policy whether it’s in the United States, the United Kingdom, Australia, New Zealand, or Canada.

1. Not Knowing Your Exact Auto Insurance Needs

You won’t like to get inadequate car insurance coverage and you won’t also like to pay more than necessary for coverage. That’s why you have to really consider what you need before buying an auto insurance policy, especially in the United States.

Related: How Much Auto Insurance Do I Need?

The laws for auto insurance are different in states. The law in California is different from the one in Nevada. You have to be sure you’re matching the minimum of what your state required.

If you only cover your vehicle with the minimum you’re going to be able to drive it, but if you have an accident it’s going to really affect your finance negatively.

For instance, if your policy only covers $15,000 but your damage worth $25,000 you’re certainly going to be responsible for the $10,000 left. 

On the other hand, you don’t want to spend more money than required that’s why you have to know from your agent and insurance company all about the coverage for your type of vehicle. It’s advisable to make inquiries from different auto insurance companies and agents.

2. Not Considering Other Options

Avoid being desperate when going to buy an auto insurance policy. It’s not often a nice idea to buy from the very first company you find. Take your and shop around.

Consider other companies’ offer; their freebies, bonuses and distinguished coverages. A reliable car insurance agent can get you free quotes from different companies, or you can check for companies and their policies yourself online. Numerous sites abound where you can compare insurance quotes and get the best result.

There are a couple of things you need to get the best car insurance rate. Be sure those details are checked off.

Note that comparing insurance quotes isn’t always as easy as you would think because companies’ policies hardly have exact matches. That means you’ll need to look at different offers, coverage levels, deductibles and more to make sure you’re comparing as closely as you can and that you’re going to get the right level of coverage for a fair amount.

If need be, hire an independent insurance agent to help you look through all the facts and figures. Examine their recommendations to be sure they are fully independent.

Related: 4 Remarkable Ways to Grow as an Independent Insurance Agent Faster than Your Competitors

3. Not Going For a Better Deductible

A deductible is an amount you have to pay before your insurance company picks up the tab. There are generally several different options when it comes to your deductible.

If you have a lower deductible you’re going to pay more for your insurance every month. In many cases, you should consider choosing a higher deductible because it means a lower premium each month.

That makes it a great way to save some money if you’re able to come up with a higher amount in case of an emergency.

Related: How to Get the Best Car Insurance Quotes at an Affordable Price

4. Buying a Too Expensive Vehicle

Some cars are more expensive to insure because of their performance, while others cost more due to high repair costs. If the car uses lots of advanced materials, such as aluminum, it will be more expensive to cover.

It’s advisable to discuss details of some of the different types of vehicles that you’re looking at with your insurance agent. This may help you make a better decision about purchasing a car.

Note that a high-risk driver together with an expensive car is a no-no for some insurance companies.

Related: 7 Major Challenges Facing the Insurance Industry

5. Not Considering Different Drivers

If you add your teenagers or a high-risk driver to all your auto insurance policy you’ll give room for the company to charge you more on your coverage.

You can add your teenager’s name to the vehicle that isn’t too expensive instead, and never add a name of someone with a bad driving habit on your policy.

Related: 6 Foolproof Things That Can Affect Your Car Insurance Premiums in 2020

Are you making any of these common car insurance mistakes? Here’s your best opportunity to correct them or learn how not to make these errors when buying your car insurance policy.

Austin Opara
Austin Opara is contributor to My Top Insurance Blogs and a freelance writer.

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