Many people feel negative about their auto insurance. They are required to pay for something they might never use. Although auto insurance is required by law for drivers, there are many misconceptions that could influence your decision to purchase it. These are five common mistakes you should avoid before buying auto insurance.
1) SELECTING YOUR LIMITS BASED ON MINIMUMS YOUR STATE REQUIRES RATHER THE TYPE OF VEHICLE THAT YOU DRIVE.
It’s vital to be legal. Companies won’t sell auto insurance below the state’s minimum requirements. However, choosing only those minimums could leave you with large out-of pocket expenses if you have to make a claim. The damage to your SUV could be severe if you collide with another vehicle. California has a $5,000 minimum requirement for property damage. If you do $20,000 damage to a BMW, Mercedes or other vehicle in California, who is responsible for the $15,000 remaining? It’s you, not your insurance company. When choosing your insurance limits, it is best to consider your vehicle’s size and weight as well as the potential damage that you could do to another vehicle. Higher limits may be better for you if you aren’t willing to spend large sums of money.
2) DO NOT BUY YOUR POLICY based on the PRICE ALONE. You might make a mistake if you compare auto insurance quotes, and decide to buy the lowest price without looking at the terms of the contract. To compare apples to apples, ensure that your quotes are as comparable as possible. Before you buy your policy, make sure to check the availability of the company. A company with no customer service is useless.
3) DO NOT SHARE YOUR DRIVING HISTORIY UP-FRONT.
Your rate won’t be accurate if you don’t mention tickets, accidents, or other moving violations in a quote. Although the price might seem attractive, it will surprise you when you actually buy the policy. Because they will check your driving records and determine your driving history, insurance companies can adjust your policy’s price or cancel it. It is a good idea to inform your agent about your driving record in order to receive a better rate.
4) SELECTING ALL AUTO INSURANCE COMPANYS AS ONE. YES, BUT NOT.
Insurance companies are regulated state-by-state. However, not all insurance companies will offer the same products or coverage in every state. Make a list of the most important things to you before you choose a company. What are your priorities? Price, availability, and convenience? Repair shop options? What types of parts are used? Some may use after market. Ask each agent to discuss the items on your wish list so they can best meet your needs.
5) CHOOSING INSURANCE COVERSAGE’S THAT ARE AVAILABLE THROUGH OTHER AVENUES.
There may be a duplicate policy elsewhere. AAA may cover towing if your car breaks down. You don’t have to add Roadside Assistance coverage to your policy in these situations. Towing would be covered elsewhere. You may be able bypass Personal Injury Protection if you have health insurance that covers injuries from an accident. However, this is only possible if your state doesn’t require it. You may not require Custom Parts and Equipment coverage if your car has been modified with custom parts. If your warranty policy covers GAP coverage, then you might not need Loan/Lease Payment coverage from your insurance company.