Do you want to be able to drive your car without the worry that it will get stolen, vandalized or damaged in an accident? One way to do this is by getting insurance for your car. However, when buying insurance, there are many things you should know about before committing.
You might think that because a station wagon doesn’t look like a sports car or cost as much money, it won’t need expensive insurance coverage. But in reality, station wagons can be just as costly and vulnerable to theft and vandalism if not more so than other types of cars! This blog post goes over 7 common mistakes people make when buying Station Wagon insurance and how you can avoid them.
1. Choosing Insurance Based on Price Alone
When shopping for insurance, most people are concerned about the price they will have to pay. This is understandable because nobody wants to spend more money than they need to. However, you should not base your entire decision on just price alone. Often times, it can be tempting to choose the cheapest insurance policy available, but in this case you may be paying with your hard earned money for something you don’t even need.
2. Not Knowing the Different Kinds of Coverage Available
There are many types of coverage available to you when it comes to car insurance, but if you don’t know what different types of insurance there are, then you can’t make an informed decision. Generally speaking, the higher amount of protection you want for your car, the more expensive it will be. The following are common types of insurance coverage that come with Station Wagons:
Pays for damage to your vehicle caused by an accident with another vehicle or object (i.e. pole). This type of insurance is usually required by a bank if you’re financing your car. It may also be referred to as “Comp” coverage.
Pays for damages not caused by an accident, such as theft or acts of nature (i.e. fire). This type of insurance is usually not required but it is highly recommended in case your car gets vandalized or if it is stolen.
Uninsured/Under Insured Motorist Coverage
Pays for damages if you’re involved in an accident with someone who does not have insurance or does not have enough insurance to cover your expenses (i.e. hit and run). This type of coverage is required by law in most states.
3. Only Worrying About Collision Coverage
Because a Station Wagon costs a lot less to buy than a sports car, you might automatically assume that it also has cheaper insurance coverage as well. However, this is not true because there are many additional factors that determine the cost of an insurance policy besides the price of the vehicle itself.
For instance, the color of your car can make a big difference in how much you pay for insurance coverage. Insurers assume that black cars are more likely to be involved in an accident than other colors because they blend into the darkness. So if you have a black Station Wagon, don’t expect to pay lower premiums!
Also, the location where you normally park your car can also affect how much you pay for insurance. If your Station Wagon is parked on the street in an area with high crime rates or a lot of traffic, it is more likely to be vandalized than if it were kept in a garage.
Insurance companies keep track of these and many more factors (i.e. how often you drive) when deciding how much money to charge you for insurance coverage, so if one or more of these factors apply to your Station Wagon, then it is likely that you will pay higher rates than someone with a different car.
4. Not Knowing How Much Coverage You Actually Need
This is a big mistake that is often made by consumers. It’s easy to assume that you only need the minimum amount of insurance coverage which is required by law (usually $10,000 or less), but many states allow insurers to charge more if you want additional protection above and beyond the basic mandatory coverage. So what happens when you’re in an accident and your damages exceed $10,000?
Well, if you don’t have extra coverage on top of the minimum amount required by law, then you will be personally liable to pay any additional money needed for repairs. This is not something you want to deal with after an accident — especially when it is not your fault — so always err on the side of caution and get enough coverage to protect yourself from lawsuits.
5. Not Getting Enough Liability Coverage
In the United States, every state requires drivers to carry a certain amount of liability coverage which pays for injuries or property damage that you may cause to another person. In most cases, the minimum amount of liability coverage is around $10,000 which can be quickly depleted if you’re involved in a multi-vehicle accident.
In fact, many states allow drivers to purchase additional liability coverage beyond the minimum required amount so that your insurance will pay for the expenses of your passengers as well as other drivers or pedestrians who are injured in an accident caused by you.
Please note that some states may not allow drivers to purchase additional liability insurance unless the accidents are your fault, so you should find out what your state’s laws are concerning this issue.
6. Being Unaware of How Insurance Companies Work
The average consumer probably does not understand how an insurance company actually calculates their premiums for each driver so it is easy to be tricked by a deceptive insurance agent or broker. If you have been with the same insurer for a while, this is even more of a reason to be wary because it means that your current insurance company has a set price on your vehicle and assumes that it will not need much in the way of repairs.
One way that agents may trick you into thinking their company is cheaper than it really is is by offering you what they call the “military discount.” This only makes sense for people who are currently serving in the military or have served before, so if you haven’t, then this insurance agent may be trying to get your business more than anything else.
7. Not Being Knowledgable About Car Insurance
There are dozens of insurance companies in operation throughout the United States, so it is important to find one that you trust. If there is a reasonable rate that appeals to you then you should probably go with it because car insurance is only needed when you get into an accident or have an incident which requires police involvement.
However, some insurers have great rates but offer terrible customer service which flies in the face of all your hard work. No matter what kind of car you drive, it is important to find an insurance company that will be there when you need them the most; otherwise, they are probably not worth your time or money.
Do I need to purchase all of the coverages which are offered by my insurer?
No. It is perfectly acceptable to select only those coverage types that you feel are necessary for your driving needs, but it is usually more cost effective in the long run if more insurance protection is purchased instead of less.
Who is the best insurance company to purchase coverage from?
There are dozens of companies which offer competitive rates and discounts but will not be able to match their level of service. It is important to shop around so you can find an insurer which fits your lifestyle, but you should avoid companies which are difficult to reach or do not have the ability to provide you with the type of coverage that you need.
Will my insurance rates go up by purchasing more than the minimum required liability protection?
Insurance premiums usually increase whenever a driver opts for additional coverage, but in most cases your premium will be discounted instead of being raised if the amount of auto insurance that you purchase meets or beats the minimum requirements set by the state.
Can I purchase additional liability insurance over the phone with my insurer?
No. All insurance coverage types are subject to certain state regulations which require agents to meet with drivers in person so they can explain the types of coverage available and answer any questions which you may have.
What are some of the most common mistakes which people make when purchasing auto insurance coverage?
A person can often reduce their premiums by retaining a clean driving record since some companies reward good behavior with better rates. It is also important to find out how an insurer calculates your premium so you can calculate what type of policy you need to buy.
Do I have to purchase a certain amount of insurance coverage in order to do business with an insurer?
No, but it is usually a bad business practice to contract with customers who only have the minimum requirements for insurance protection. In some cases, this might mean that your policy will not be renewed or you may find yourself ineligible for certain discounts.
What happens when you have a claim with a company that is not your primary provider?
You may be going through a claims process without all of the coverage types that you have paid for. In some cases, this will mean paying out of pocket for medical expenses and car repairs until your insurance adjuster can work things out with the other party’s insurer.