Top 5 Mistakes That Car Insurance Shoppers Make
Avoid costly, unnecessary mistakes when purchasing car insurance by doing the research up front. Below is a list of the most common oversights:
- Not Considering Your Requirements
Without an honest look at what you need, you may very well pay too much for optional coverage, or conversely, purchase a car insurance policy that does not provide sufficient protection.
- Not Shopping Around
To get the best price, you will want to get multiple car insurance quotes. Insurance companies can offer the exact coverage at very different prices. Risk analysis varies from agency to agency.
- Not Understanding Your Needs
Optional coverage may be nice to have, but to prevent unnecessary purchases, ask yourself these questions:
- When considering rental reimbursement coverage, do you have transportation available if your primary vehicle is in the shop?
- Considering emergency roadside service – Do you already have AAA or another company?
- If you have a new and/or valuable car, you may want to consider collision and/or comprehensive coverage.
- Are your leasing your vehicle or have a loan? The balance owed can be substantial if your car gets totaled. Gap coverage is a good choice.
- Not Buying Enough Coverage
If another party’s damages in an auto accident exceed your coverage, you could be held liable for the remaining costs and even sued. Compulsory coverage is rarely enough to protect your assets. You can lower your monthly premium by raising your deductible, but it may be too much to incur after an accident. Consider the amount you will have to pay at a moment’s notice and your ability to save enough for that.
- Carrying More Insurance Than You Need
A good rule of thumb is if your premiums are more than 10% of the total value of your vehicle. If your car is paid off, are you able to afford to replace it? Carrying comprehensive/collision may not be most cost effective.
By considering your needs and doing the necessary research to compare car insurance companies, you can avoid costly mistakes. A little work up front will ensure the right coverage at the best price.