Auto insurance, or any type of auto insurance, is something we just can’t avoid. In most developed countries, it is illegal to drive a vehicle on public roads without proper protection, so we really have no choice but to bite the bullet and cough.
That being said, the average person continues to pay more than necessary, simply because they make the same mistakes over and over again. Here are 10 mistakes to avoid when it comes to car insurance:
1. Do not compare prices
Many people purchase insurance with a particular company simply because the company was recommended to them by friends or family. This can be a very costly mistake because there are so many variables involved and also just because you had the best rates last year doesn’t mean they’ll still offer the best rates this year. You should get quotes from at least six or seven providers before making a decision.
2. Choose the Minimum Deductible
The deductible is what you pay out of pocket if you file a claim. The lower the deductible, the less you will pay in the event of a claim, but the higher your premiums will be. Increasing the deductible amount, within reason of course, can greatly reduce the cost of auto insurance.
3. Maintain the same level of coverage
Sure, if you buy a new car, or even a relatively new one, you’ll want the maximum coverage, so you buy comprehensive coverage. This type of coverage will cover you completely no matter what, but it costs. But, once your car has aged a bit and decreased in value, do you really need maximum coverage? After all, you could end up paying more for insurance over a two-year period than your car is worth.
4. Lack of information about discounts
Don’t assume your insurance provider will keep you updated on new discounts or special rates. Why would they want to willingly lose money?
5. Including unnecessary drivers
If you have more than one driver in your household, only include those who use your car regularly on your auto insurance policy. This is particularly true in the case of adolescents. If your teen only uses the car once or twice a year, opt for temporary coverage when needed.
6. Include all drivers as full-time drivers
If your partner or child only uses your car occasionally, ask your insurer if they offer discount rates for occasional drivers or limited mileage.
7. Not checking driving history
While it may not be a common occurrence, many people end up paying more for insurance because their driving record shows a history of moving violations and/or accidents, when in fact they have never had such violations or accidents.
8. Bad credit
Contrary to what many people believe, many, but not all, insurance companies will run a credit check, and if you have poor credit, it can dramatically increase your auto insurance costs. If your credit score isn’t perfect, choose a provider that doesn’t take a person’s credit score into account.
9. Claim of Minor Incidents
Do not file a claim for minor things. If you can afford minor repairs out of pocket, you’ll benefit more in the long run. The more you claim, the higher your premiums will be.
10. Not doing research before buying a car
Certain makes and models cost more to insure simply because statistics show they are more likely to be stolen. Check with insurance providers to find out which cars are best to avoid before buying one.
Auto insurance is here to stay, but if you avoid these common mistakes, you may be pleasantly surprised at how affordable coverage can be.