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8 Auto Insurance Buying Mistakes and How to Avoid Them

According to current estimates, nearly 215 million drivers across the United States carry their own car insurance. The average cost of insurance for Americans is around $140 every month.

If you’re paying more than this, it’s likely you’ve fallen for one of the many common auto insurance buying mistakes. In this article, we will tell you the 8 common mistakes that people make when shopping for insurance and what you can do to avoid them.

Around 2 million people a year experience permanent injuries as a result of car accidents. Read on to learn how to make sure your auto insurance policy is the right one that has you covered.

1. Not Getting Enough Coverage

A lot of people cut corners when it comes to choosing auto insurance providers. They are always focused on the cash bottom line and trying to reduce costs.

The problem with that is that it can leave customers without the right coverage. Then when they come to use their insurance, they realize that they don’t have a policy that suits their needs.

2. Not Disclosing Prior Claims

Before you get a quote, an insurance company will ask you to disclose any prior claims you’ve had.

If you fail to disclose these, your rate could be bumped up later on and be much more expensive. It’s always best to be straightforward and upfront with your claims.

3. Being Unclear or Unfamiliar with Your Policy

Once you’ve gone with an insurance company, make sure you understand your policy inside and out! Read the document and the wording and make sure you’re aware of what you are covered for and what you aren’t.

You could end up with a nasty surprise further down the line if you aren’t well versed in your insurance policy.

4. Buying the Cheapest Policy

Getting the cheapest policy doesn’t mean that it will be the best policy for you. It’s important to compare your options for insurance and shop around. Don’t just settle on what the numbers say, see what’s included in that price.

The cheapest policies will often mean you have high excess fees or deductibles and you may incur other costs.

Compare quotes to find the best affordable car insurance that offers the right kind of coverage.

5. Not Receiving All the Discounts You Qualify For

You are eligible for certain bonuses and discounts for things like no-claims or no-accidents. Make sure you update your quote to reflect all of the things you are eligible for.

These discounts can significantly affect your overall amount, especially if you haven’t had to make a claim.

Things such as installing an anti-theft device on your car can also help with bringing down the cost.

If you ask for a list of all the discounts they offer, you can go through and tick off every one to see if you qualify. This means you get the best overall quote for your individual situation.

6. Not Disclosing All of Your Drivers

It might be tempting to not disclose all of the drivers on your insurance policy to keep the costs down. Especially if you have dependents who don’t use the car much.

However, this can be a serious issue if anyone driving your car doesn’t have the right coverage and is involved in an accident. This could have severe repercussions for their medical care or how the police treat the matter.

You need to always disclose exactly how many people are on your insurance. Insurance companies can easily access this information, and if they find your details to be incorrect, you could be hit with a large fine.

You could also have your insurance canceled entirely and struggle to find coverage elsewhere. This is why it’s always best to be upfront and honest about your insurance and the number of drivers.

7. Ignoring an Insurance’s Reputation

A car insurance company might offer attractive and favorable rates for their car insurance. However, you always need to check out their customer service reviews.

If an insurance company has a lot of negative reviews when it comes to handling their customer’s claims, this could be a sign that you shouldn’t take out a policy with them.

There’s no point in having an insurance policy with a company that is reluctant to help its customers or has poor customer service skills.

Stick with an insurance company that puts the customer first and responds well to any issues.

8. Ignoring Payment Policies and Options

When we think about paying bills, we often don’t educate ourselves enough on the payment plans and policies in place.

This can lead to us accidentally incurring late fees and ending up unnecessarily paying more in the long run. Make sure you know what day your payments are due and set up a direct debit so you don’t even need to think about it.

There may also be an option to pay for your insurance up front in one lump sum. Sometimes there’s a discount for paying your insurance in one go, so it’s worth weighing up that option if you can afford to. You can opt for affordable SR-22 insurance that suits your requirements.

Auto Insurance Buying Mistakes: What to Avoid

When you aren’t a finance expert, it can be easy to fall into the trap of auto insurance buying mistakes. In our busy lives, it can be one of those jobs that fall to the wayside and you don’t want to spend a lot of time thinking about it.

Auto insurance is climbing 5% in 2022, so it’s crucial to shop around to get a good deal. However, with a bit of research and knowledge about what to look out for, you can recognize the best options for insurance for you and your circumstances.

Remember that getting enough coverage can save you more money down the line if you do need to claim on your auto insurance policy.

If you enjoyed this article and found it helpful, why not check out some of our other articles?