We all want to save money on our auto insurance, so we choose the best rates for our budget. However, it’s very easy to make a mistake and pay too much for your policy. In order not to overpay for car insurance read 5 common mistakes people usually do when choosing an insurance company.
1. Not having enough coverage
In most states you have to have insurance for your vehicle. If you will not have enough money if you get into an accident, it’s a liability coverage that pays for injuries and damages to others when you’re at fault in the crash. In most cases minimum amount is $15,000/30,000/10,000 (amounts are in thousands). Look into your state’s laws – there may be a demand to have insurance for your vehicle.
2. Being loyal to the company that gave you a great quote last year.
Yes, it is nice when you’re getting well-covered for less money, but being loyal means being overcharged. Always compare rates of different companies before you choose an insurance provider.
3. Assuming your credit score doesn’t matter.
If you have a low credit score, it may raise your premium by 35% more than the customers with high FICO scores*. So if you want to save money on auto insurance, don’t forget to check if your credit score is good.
4. Being loyal to your car’s brand.
If you want to pay less for your insurance, don’t be loyal to the cars of one company. Your premium may be higher because there are more expensive cars on the roads where you live. If you have found a great auto insurance quote somewhere else, try searching for another company and check rates.
5. Picking the cheapest deductible.
Choosing a high deductible is not always the best thing to do, because if you will have an accident or your car will be stolen your premium won’t go down. Also, in most cases high deductible means higher rates.
6. Not asking for a better deal.
If you aren’t satisfied with the premium you have now, call your insurance company and tell them what you want. Don’t be shy to ask for discounts, lower payment or other benefits that might help you save money on auto insurance.
7. You do not understand what your insurance covers.
Don’t assume that you have full coverage if you pay for it. Read the terms and conditions of your policy in order to know everything about your insurance company’s coverage, discounts and other benefits.
8. Not comparing rates when changing vehicles or adding drivers to a household.
If you are adding a new car or driver to your policy, always compare insurance rates before choosing an insurance company. Insurance providers change their rates frequently depending on certain variables, so it’s very easy to save money on auto insurance if you shop around.
*The study is conducted by the Northwestern University in 2011. It shows that customers with low credit scores pay an average of 12% more for car insurance than those with high FICO scores.
Is it better to bundle home and auto insurance together?
Yes, always try to bundle your home and auto insurance policy. If you do so, you can get up to 15% off your coverage.
How can I save money on auto insurance?
Always compare rates of different companies before choosing an insurance company for your vehicle. Also, if you have a low credit score or a bad driving history, try to find an insurance company that will offer you cheap rates.
If I’m adding a new car or driver to my policy, what should I do?
Always read the terms and conditions of your current policy before choosing another insurance company. If your current insurer won’t add the new car or driver to your policy, try to get a quote from another provider.
What’s the best deductible for me?
It depends on how often you drive and how severe car accidents are in your state. On average, it’s recommended to choose a deductible that is two times lower than the minimum amount required by your state.
Without Further Ado
I hope this article has helped you avoid these common mistakes. If not, comment below and share your thoughts on what other topics should be covered in the future. We’re always looking for new content ideas to write about!