Mistakes to Avoid When Buying Auto Insurance

Posted June 29, 2013 | Filed under topic Auto Insurance Buying Tips

Buying auto insurance is more complicated that most people think. That is because there are pitfalls in the road to getting the coverage that can come back to bite the buyer.

Common Mistakes when Buying Auto Insurance

• Most people know that is necessary to check with several companies and get quotes from them before making a decision when buying auto insurance. If you are not sure how they compare, find someone who can explain the differences. Comparing apples to oranges is a tricky proposition at best.
• Some companies offer minimum coverage, giving you a policy that meets the state’s minimum standards. That can be more costly in the long run. If you run into the back of an expensive sports car, for example, minimum coverage is going to leave you with a large repair bill to pay out of pocket – most likely more than the additional coverage would have cost.
• If you are one of those people who get a blank glaze on their face two minutes into the explanation of insurance by an agent, snap out of it and make the agent explain it in terms you fully understand. That can eliminate any nasty surprises later.
• Get your quote in writing and keep it in your files for later reference. And, because insurance companies check your credit rating, don’t let that hit the skids, either.
• It is important to be honest with the agent when buying auto insurance. You need to tell him about prior claims – if you lie or omit that information, your rates could be in line for a severe increase later. Make sure you also tell the agent about all the people who will be driving the car.
• Paying premiums on a monthly basis is more expensive in the long run. Try to get it setup so you pay it quarterly or every six months. Further, make sure you are getting all of the discounts you qualify for in the first place. And, whatever you do, don’t forget to make the payments on time.
• You are better to avoid getting the smallest deductible possible, but that will make your monthly premium higher. Remember, too, that filing small claims will probably cost you more in the long term than paying those yourself.
• Ask if the company offers accident forgiveness when buying auto insurance, an act in which the company won’t up your rates on the first accident.
• Always tell your agent if any changes occur, such as changing vehicles or minor accidents. The law requires you to do that.
• Make sure that if you have an accident, rental car coverage is included and that those cars are insured while you drive them.
• Know what your car is worth. If it is a junker, you should not insure it in the same amount you would a new car.
• For couples it is better for the car to be insured in one person’s name – that excludes the other from any potential liability claims.

Finally, if you are not sure what to do when buying auto insurance, print out this story and go through it with your agent.