Wednesday April 14, 2021

updated - April 14, 2021 Wednesday EDT

5 Big Car Insurance Mistakes You Should Never Make

Jun 11, 2020 10:59 AM EDT | By Staff Reporter
5 Big Car Insurance Mistakes You Should Never Make
(Photo : 5 Big Car Insurance Mistakes You Should Never Make)

Shopping for car insurance can be intimidating and time-consuming. Finding the best policy for you is about so much more than going straight to the lowest-cost option. There are several variables you should consider and questions you should ask throughout the process. Whether you were in a car accident or your vehicle was damaged by bad weather, protection is necessary. Knowing some more common mistakes can help you on your hunt. Here are five tips to help you avoid costly mistakes: 

Failing to Understand Fine Print

Studies have shown that the vast majority of people don't read the fine print. But when it comes to something as serious as your vehicle coverage, it's crucial that you go through the contract and pay attention to the finer details. The last thing you want to do is end up paying for coverage you don't need, or not paying for coverage that you do need. Do your research and come up with a list of questions, and don't be afraid to ask to speak to a representative to walk you through the answers to your questions. 

Foregoing Extended Warranties

Extended warranties help you cover any repair costs that may arise after the standard manufacturer warranty has expired. Extended warranties may not be best for everyone, but it's always worth looking into to determine this for yourself. One of the biggest mistakes you could make is not looking into your options for extended warranties, and then finding yourself having to pay for crippling repairs out of pocket. 

Like any type of insurance, the goal is to focus on preventative measures. You want to have a system in place to help you in the event of an emergency. Olive has announced the release of their extended warranty tool to see how much an extended warranty would cost you. As the old adage goes, "better safe than sorry." 

Buying Minimum Amount of Liability

No one enjoys paying more than they have to. But chances are, it would be a mistake to automatically buy the minimum amount of liability for coverage in your state. Many people do this to keep their car insurance premiums as low as possible. 

In certain cases, if you opt for a minimum, there are many situations where your car won't be even close to covered in the event of an accident-especially for high-value cars like BMWs. Determining how much car insurance coverage is enough depends on several factors, including your location, the type of vehicle you own, and how often you drive. 

Not Shopping Around 

It would be a mistake to assume that all insurance companies are the same. For many people, particularly those with little car insurance experience, they may run straight to a brand name that's common. However, it's crucial that you shop around and gather several quotes. Talking to customer service representatives will also help you gain a better idea of how they handle their clients. Before you make a decision, check out the rates from three or four different companies. Compare costs and experience. You'd be surprised at how wide the range is for the same coverage across different carriers. You should also do this if your policy is up for renewal, rather than automatically renew. 

Only Focusing on the Number

As previously mentioned, it's important to shop around for different prices from different carriers. However, it's equally important to dive beneath the number to explore what's included. Just because two carriers offer the same price doesn't mean that one of them doesn't have several advantages over the other. While price is certainly important, you should also pay attention to benefit limits and levels, as well as the reputation for claims. 

Lying on Your Application 

If you've been involved in accidents or have tickets that you know will impact your coverage quote, don't bother lying on your application. There are instances where people purposely leave out details in hopes of tricking the insurance company, but rarely does this work in their favor. Insurance companies will check your background and driver history to come up with a final quote, and when you provide inaccurate information, that final quote will be vastly different than what you were initially provided. Ultimately, this will slow down the process of getting insurance, and result in much more work for you.

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