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Five Common Car Insurance Mistakes to Avoid

  • Auto Insurance
  • Xavier Sabastian
  • 4 minutes

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Nobody enjoys shopping for car insurance. It’s never appreciated until you need it. Car insurance can account for a sizable portion of the cost of driving a car. You want a car insurance policy that provides the most coverage for the least amount of money. Getting the right car insurance while avoiding costly common mistakes can help you get there.

Avoid these common car insurance mistakes

Common car insurance mistakes to avoid

Finding the right insurance coverage is just as important as finding the right car. Believe it or not, the two decisions are inextricably linked. Your insurance options are influenced by the car you choose, and your insurance budget may limit the vehicle you can drive. It is illegal to drive uninsured in most states, so finding the right car insurance coverage is critical in getting on the road. Take a look at the following pointers to avoid common auto insurance purchasing blunders.

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Not knowing your exact auto insurance needs

Every state has minimum coverage requirements, but you shouldn’t base your decision solely on those. Each person has different protection needs based on a variety of other factors, including:

  • Driving mileage
  • Model and type of car
  • Cost of your car
  • Driving experience
  • Weather conditions in your area of residence
  • Driving conditions of your place of commute

common car insurance mistakes

Not comparing other insurance options

When people go shopping, they usually compare the prices of retail goods. So when shopping for car insurance, use the same logic. This will increase your chances of finding a good deal. When shopping for car insurance, always get at least three quotes from different companies. Unless you have complex insurance needs that necessitate one-on-one counseling with an insurance agent, you may be able to save money by not having brick and mortar locations or independent agents to whom they must pay commissions.

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Even if you can’t bring yourself to use a company that doesn’t have physical locations, you can get quotes and compare prices from many traditional insurance companies websites. When buying car insurance online, make sure that any documents you fill out are correct. You won’t be able to double-check the forms because you won’t have an insurance agent.

Not going for a better deductible

When paying your premiums, having a low deductible – the amount you must pay before your insurance company picks up the tab – is advantageous after an accident. Still, it is costly to have a low deductible, and you should opt for a higher deductible to save money in many cases.

Policies with lower deductibles are more expensive than those with higher deductibles. If you usually have enough money in your savings or family emergency fund to cover a higher deductible, you’re probably better off choosing a policy with such a deductible. Simply increasing your out-of-pocket expenses from $200 to $500 can save you a significant amount of money on your comprehensive and collision coverages.

Before going this route, make sure you understand what your state or lender requires. 

Buying a car that’s too expensive

Car insurance companies charge different rates for different types of cars. Different trim levels and engine options can impact how much auto insurers charge to cover the car. Failure to consider the cost of insuring various cars before purchasing one can cost you thousands of dollars.

Buying very expensive cars are common car insurance mistakes

Before you go to the dealer, talk to your insurance agent or get free online quotes. Some cars are more expensive to insure. This is due to their performance, while others are more expensive due to high repair costs. It will be more expensive to insure a car that uses advanced materials, such as aluminum, ultra-high-strength steel, or carbon fiber. Some insurers will not even cover high-performance sports cars if you have high-risk drivers in your household. 

Not considering different drivers

You do not have to add your teen’s name to every car insurance policy in your household. You’ll probably save a lot of money if you put them in the five-year-old family minivan. While the mere presence of teen drivers in your household will almost certainly raise the cost of all of your cars, being selective about which car policies you formally add them to can save you a significant amount of money. Of course, your teen driver may disagree with your decision, but insurance rates are calculated using statistics. 

Not considering different drivers are common car insurance mistakes

They show that inexperienced drivers are more likely to get into trouble in high-performance cars than in mainstream cars. Similarly, if one member of a couple has bad driving habits, such as crashes and moving violations on their record, merging your policy with them is probably not a good idea.

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