While most people do not like paying for auto insurance, having it is a requirement in many states, and it also protects you financially if you are at fault for an accident or if your vehicle is stolen or damaged. Buying auto insurance the right way is essential if you want a policy that best suits your needs. If you're buying auto insurance soon, avoid the following common mistakes.
Automatically Buying the Cheapest Policy
Most people want to save money on their auto insurance, but automatically buying the cheapest policy is not a good strategy. The cheapest policy may not include everything you need, and that could leave you financially vulnerable in the event of an at-fault accident or vehicle loss. It is in your best interest to get several auto-insurance quotes so you can compare them side by side and then purchase the one that provides the best coverage regardless of cost.
Not Understanding a Policy
Before buying a new auto-insurance policy, it is very important to know the exact terms of what you are purchasing. You wouldn't sign a contract without reading it and understanding it, and you shouldn't buy auto insurance without taking the time to know exactly what the insurance company is agreeing to cover in the event that you make a claim. It is also important to make a note of your insurance deductible so there are no surprises in the future.
Paying More than You Need To
Insurance companies offer a lot of discounts on auto insurance, but they are not always automatic. Purchasing auto insurance online is very convenient, but it may be worth your time to speak with an insurance agent on the phone so you can ask about all discounts available and see whether you qualify. Having certain safety features on a vehicle, having more than one policy with the insurance company, and going certain amounts of time without a moving violation or at-fault accident can all result in discounts. Over the life of your policy, you can save a lot of money if you maximize available discounts.
Failing to Disclose All Drivers
If more than one person in your household is going to be driving a vehicle on a regular basis, it is imperative to name them on the insurance policy. In the event that someone who lives in the household is at fault for an accident but is not named on the policy, an insurance company may elect to deny the claim, and that could leave you in a seriously precarious financial situation.