Common Car Insurance Mistake

LifeStyle on June 12, 2019

We all want the best price when it comes to car insurance, but you need to be careful that you have the correct coverage that you need, and that you don’t do anything that may jeopardize this coverage. Here’s a look at 5 common car insurance mistakes made by people and how you can avoid them.

Mistake #1: Signing up for the first policy that you come across.

Many people just sign up for the first car insurance policy recommended to them by an insurance agent. They don’t even look at the other offers that are available. That’s a mistake – ask for free quotes from different insurance companies and choose one that you like best. No, you don’t have to study each policy – just read those that are highly recommended, let’s say the top 3. Talk to your insurance broker about the differences.

Mistake #2: Thinking all car insurance policies are the same.

There is a huge difference between various car insurance policies. Every policy has certain unique components or a combination of many components. For instance, does the policy include property damage liability, bodily injury liability and coverage for underinsured/uninsured motorists? What about the deductible and coverage level for each of these components? Also, does the policy include comprehensive insurance coverage or not, which will cover your car in case of natural disasters such as hurricanes, or fire, theft and vandalism?  Does the policy have collision insurance, which covers the cost of car repair in case the vehicle is damaged in an accident? These are all questions you should be asking.

Mistake #3: Not reading the policy document before signing up.

Read the policy document carefully. Does it have answers to every question you have in mind? Is it vague or confusing in any way? In that case, call up the insurance company and ask for a more detailed explanation. But definitely don’t sign the document until you read every word of it and are 100% satisfied with what you see.

Mistake #4: Lying on your application.

Lying is a strong word for this – but a lot of people don’t answer all questions in the application accurately. For example, some fudge their income level and are disingenuous about their driving record. Insurers need all the details to quote you accurately. If you try to mislead them in any way, they are smart enough to catch that and will most likely reject your application.  Sometimes rejections occur not because you’re trying to mislead the insurer, but because you don’t remember your zip code, or aren’t aware of the type of your car, such as its engine size or trim level.

Mistake #5: Failing to update your car insurance policy after marriage.

Did you get married recently? Congratulations! Enjoy your honeymoon, but before that update your status in the car insurance policy. Married people get lower rates. Similarly, if you move to a family friendly place or a safe neighborhood after your marriage, make sure the insurance company knows about it. They will be more than happy to cut your rates.