AUTO INSURANCE ARTICLE
Common Mistakes to Avoid When Buying Car Insurance
By: AutoInsuranceGuyLet’s take a look at the common mistakes that consumers make when buying their car insurance so we can avoid it and save a lot of money. Buying car insurance is not very easy to negotiate but then we wouldn’t want to be left paying tons of money for it nor realize later on that we’re not covered. Having the wrong auto insurance, or making the wrong claims can seriously hurt your finances. Take a look at the following points and try to keep them in mind when buying your car insurance.
First thing to remember is that your car insurance salesman is NOT your friend. The cheapest car insurance for you obviously does not bring the best bonuses for salespeople. It is in the salesman’s best interests to sell the least amount of insurance that they can possibly justify. This is because smaller policies leave insurers less exposed to risk and proportionately tend to be more expensive. Thus, they are more likely to be profitable for insurance companies. So you have to make sure your have “liability” coverage (which is required in most states anyway) to cover costs of another person’s car damage and injury, “comprehensive” to protect you if your car gets stolen or catches fire, and “collision” to cover damages if your car collides with another vehicle regardless of who’s at fault.
When buying auto insurance, we often think of it as a way to protect our cars from every bump and scratch. This is actually a very bad idea. Instead, we have to keep in mind that we should insure for what we cannot afford to lose. Thus, the second thing we should keep in mind is not to have a tiny deductible. Small deductibles of $100 to $250 may incur premium hikes or worse, your insurance company will say that they will not insure you. Higher deductibles that extend to higher coverage levels actually cost less and will protect you from costs related to more serious car problems.
Never assume that all cars need the same insurance. You may want to get full insurance for your luxury red sports car but not for your pickup truck that you use sparingly. Just as you shouldn’t waste insurance on minor incidents, some cars are not worth the full insurance package. I strongly suggest that you still maintain your liability insurance in case you cause an accident.
Another point is to avoid owning a car jointly. Although this may not come up buying or getting insurance quotes, it makes a huge difference in potential payouts. There is absolutely no good reason to own a car jointly. If you share ownership with your husband or wife, both of you are exposed to liability and can be sued.
Lastly, it may be worth getting umbrella policies. Some ignore this because of the extra cost but these are very cheap insurance policies and can help drivers who have been in major accidents. Since these policies only protect against the worst accidents, they rarely payout and thus they can be bought for a very cheap price. These policies will shelter you from liability extending beyond the limits of your standard policy so it’s definitely worth getting.