Purchasing insurance for your family car is crucial. Without it, you are putting the lives of others at risk when driving on the road. However, like many other things in life, there are many common mistakes that people make when buying insurance. In this blog post we will discuss 10 common mistakes in buying car insurance to help you avoid these traps and get a great deal!
1. Not shopping around for insurance
The biggest mistake that people make is not shopping around and getting the best deal they can get. Insurers offer different rates for different policies depending on the person’s age, driving history and type of car. The cost of insurance can vary as much as $2000 per annum between companies! If you don’t compare your options every year, you might be overpaying for car insurance.
2. Choosing a policy based on price alone
Not all cheap car insurance policies are worth it. In fact some of them can end up being more expensive in the long run as they don’t offer as many benefits as other companies’ policies that cost more. You must check the type of coverage offered by each policy. Insurers also offer discounts if you get other types of insurance from them such as home or life insurance. You need to make sure that all your bases are covered with the best possible policy!
3. Not checking what is and isn’t included in a policy
You should always read through a policy carefully to check if the things you are buying are covered or not. For example, some insurers have a policy that covers damage to your own vehicle but does not cover damage done to another person’s car if you were at fault. It might sound like common sense but it is surprising how many people do not read their policies correctly!
4. A third party instead of an insurance company
Insurance companies offer policies that are specifically designed for people who drive family cars. Car dealerships and other third parties cannot offer you this type of policy and will not know what to cover and what not to cover. You should be looking to buy directly from an insurer for this purpose.
5. Not checking how long it takes to process claims
Some insurers take longer than others to process claims. If you are making a claim for an accident that occurred last night, you need your car insurance company to process the claim as soon as possible so that you can get back on the road. You should choose an insurer who will ensure fast processing of claims so that they can help you in times of need.
6. Not informing your insurer if you change the type of car you have
If you have a family car with two young children, then it is likely that in a few years’ time they will no longer need booster seats and you will not be transporting them in a child-friendly car. If you want to save money on your policy, you should call up your insurer and ask them if the type of car you have will affect your premiums. Some companies offer discounts for families with young children so this is an easy way to reduce costs!
7. Not understanding what ‘fronting’ is
If you are insuring a car that is not in your name under your policy, then you are ‘fronting’. It is an illegal practice and one of the most common mistakes in buying insurance. If you do this, you might find that you do not have valid insurance when the time comes to make a claim. Sometimes companies ask for proof of fronting before they offer you a policy. If you do not have this proof, then it is best to just buy insurance in your own name.
8. Insuring the car and not the driver
Insurance companies offer lower rates for married couples who both drive because they can get discounts for insuring two cars under one policy. This is because insurers know that the couple will be driving together. If you are insuring one car but driving another, then be aware that the premium may not be very good.
9. Driving without insurance
It sounds obvious, but many people drive with no insurance or invalid insurance all the time! If you get caught driving without valid insurance, it is likely to lead to a big fine and possible disqualification from driving. Insurers will not offer you a policy if you have been disqualified from driving or have been caught driving without insurance. Always make sure that you have valid insurance before setting off!
10. Trying to trick the insurer
Finally, some people try to trick their insurer into giving them a lower premium by saying that they have not been in any accidents when in fact they have. Insurers will find out if you try to hide information like this and your premium could end up sky-high.
What is car insurance?
If you damage or lose your car, then having a car insurance policy means that the cost of repairs and replacements will be covered. The other party may not have insurance so it can be a big hassle to try to recover costs from them! Car insurance policies also cover repairing or replacing your own vehicle if another person causes damage to it.
Is it a good idea to start my insurance policy when I set off?
Yes, most people pick up their insurer’s standard renewal offer when they set off even if they have not had a claim or warning. You may pay more if you wait until something goes wrong! Start your policy when you set off and choose the best deal available.
Is it okay to drive without insurance?
No, it is illegal and there are hefty penalties for driving without valid car insurance. If you buy a policy when you set off but your insurer finds out that you were unlicensed when you started the policy, they can refuse to pay out for any claims.
Why would I need ‘fronting proof’?
If you are insuring someone else’s vehicle under your own policy, then you should have proof of fronting or it could invalidate your whole policy. Not many people know about fronting proof and insurers can refuse claims if you do not have this proof.
How will the type of car affect my premiums?
Generally, companies offer discounts for family cars that are child-friendly and have fitted safety equipment. If you want to save money on your policy, it is advisable to buy a family car that is easy to drive, has good safety features and is not too flashy.
What is fronting and should I avoid it?
Fronting means that you put a vehicle that is not in your name under your car insurance policy. It is illegal and insurers do not like it, so they will usually charge a higher premium or refuse to cover the car at all. If you have been fronting, then be honest and tell your insurer! You might be able to get a better premium if you own both cars outright.
Is family car insurance more expensive?
Yes, this type of insurance is generally more expensive as the policyholder has a higher potential risk of making a claim. A young driver, like your teen driver, is at greater risk of an accident and will pay more for their car cover.
Is family car insurance legally required?
It is not a legal requirement to have car insurance but it is compulsory to have third party insurance if you are driving other people’s vehicles. This means that if you damage someone else’s car, they can recover the cost of making repairs from your car insurance.
On The Whole
Comment below and share your thoughts. What are you doing to make sure that the family car is safe? Have any of these mistakes happened to you or someone else in your life before? We want to hear from our readers! Leave a comment with what’s happening for you, anything we missed here, questions about insurance coverage, etc.