Do You Make These 5 Mistakes When Buying Car Insurance?

Do You Make These 5 Mistakes When Buying Car Insurance?

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Listed here are some of the common mistakes numerous car insurance policyholders make. See if you recognize yourself:

You presume the insurance salesman is your friend.

Insurance salesmen are just that — salesmen. And they do get compensated with bonuses and other rewards for selling certain kinds of policies. Those policies aren’t always the policies that are best for you. Keep in mind that the next time you’re shopping for auto insurance. In most cases, insurance salesman are rewarded for selling the smaller policies that leave the insurance company less exposed in case you want to make a claim. These are the policies that are most profitable for the insurance company. So, as shocking as it might sound, you may actually be under-insured.

To make sure this does not happen to you, make sure that you have the basics: liability coverage, comprehensive coverage and collision coverage (see below).

Your deductible is just too small.

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Numerous consumers believe that they need to protect themselves against every little scratch and dent. That is a bad idea. You should just insure yourself for those things that you cannot afford to lose. If your car is only worth a couple of thousand dollars, do not spend very much on premiums for collision coverage by buying a small deductible.

Another reason this is a bad idea is that you will be tempted to nickel and dime your insurance company with every little thing that happens to your car. Eventually, your premium will increase or they could say, “we’re declining future coverage.”

So earnestly consider getting a much higher deductible — perhaps even as much as $1000. You’ll save money and your coverage will most likely extend to a lot higher limit.

All of your cars have the same insurance coverage.

If one of your cars is an old beater, don’t cover it the same manner that you cover your other cars. For instance, if you have an old pickup truck that you use to transport building materials and you don’t mind if it gets dented or scratched or whatever, simply get the minimum amount of coverage on it. Who knows? Maybe you simply drive it a few miles a year. Get insurance that’s appropriate for that vehicle and cover your other vehicles in ways that are suitable for them.

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All your cars are jointly owned.

There is really no reason to own a car jointly. If you share ownership with your spouse, it’s feasible that you might be exposed to liability if your spouse brings about an accident. In other words, both of you could be sued. Similarly, when your child purchases a car, or if you buy them a car, put the car in your child’s name. In that way, you can steer clear of liability for any accidents brought on by your child.

You forgot your umbrella.

Here is how umbrella coverage works: if you are in a very bad car accident that causes a lot of property damage that is over and above which your insurance policy covers, you may need to pay massive amounts of money out-of-pocket. This is what umbrella policies are for: to protect you from liability that is far beyond the limits of your standard auto insurance policy. These umbrella policies are usually rather cheap (a couple of hundred dollars) and can give you important coverage.

Conclusion

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Hopefully this article has showed you a few things that you simply can do, that will help you steer clear of common mistakes that car owners make when they purchase auto insurance.

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