Car insurance is one of those things you have to have – if you want to drive a car legally that is. Since most look at insurance as another bill for a service they probably won’t get any use out of, they tend to cut corners and skimp when it comes to shopping and purchasing car insurance. Though it may seem idealistic if you want to save a few bucks each month, these concepts of “saving on insurance” could end up costing you a lot of money in the end. Below are some car insurance mistakes you really don’t want to make:
1. Looking at Price Alone
Though your budget should be considered when it comes to purchasing car insurance, the price shouldn’t be the deciding factor when purchasing insurance. When looking for cheap insurance online, review policies in their entirety and compare the amount of coverage and additional services (like rental cars or roadside assistance) you’ll receive before making a final decision. Paying a little more for a policy that provides full protection is a lot less expensive than getting in an accident and finding out you’re not covered for certain damages.
2. Purchasing the Minimum
Another costly mistake consumers make when purchasing car insurance is purchasing the bare minimum policy. Although purchasing the most basic form of protection like liability insurance can cost a lot less initially, it doesn’t cover as much as you think. Liability coverage only covers property damage and bodily injury protection for the other driver’s and their cars should you be the one at fault. However, if your car is damaged in a hit and run, by an uninsured motorist, or damaged from something other than a vehicle, you’re not covered. You will have to pay the expenses to repair your car, medical costs, and potential legal fees out of your own pocket. Again, paying a little more for additional protection is a lot less expensive than paying for the aftermath of an accident on your own.
3. Choosing the Wrong Deductible
One of the most common ways to save money on car insurance is to increase the deductible. This is the out of pocket amount you’d be required to pay before insurance would cover any other costs related to the accident. While increasing a deductible can save you money, if you don’t have the cash available at the time of filing an insurance claim, everything is put on hold. Essentially, your insurance company won’t cover their part of the accident costs until you’ve paid your deductible. So, if you don’t have a spare $750 or $1000 in a savings account that you can access, it’s probably best to choose a deductible amount you could afford.
4. Lying on an Application
The objective for most is to find the most affordable insurance policy. In trying to secure the best rate, consumers have been known to lie on their application. Lying about your driving record, how many drivers you have in the home, and other important factors could end up costing you later. Should your insurance company find out that you lied, they could cancel the policy and/or refuse to pay your claims. It is best, to tell the truth and instead look for discounts and other ways to save on car insurance.
It is common to try and maximize your savings on bills like car insurance. Though being a savvy shopper and using savings tips is ideal, you must look beyond the cost of insurance and look at its purpose. Insurance provides financial protection for you and your loved ones in the event of an accident. Choose an insurance policy that provides all the protection you need at an affordable rate. A little comparison shopping will help you find a policy suitable for you and your budget.