- Getting Minimum Insurance Coverage
Though you may be saving money in the short term, buying minimum state required car insurance isn’t going to save you money in the long run. One small accident can set you back thousands of dollars in out of pocket expenses, all because you decided to stick with minimum liability coverage and skip out on collision coverage. Even worse, if you cause an accident that’s fatal—ie, someone dies or is paralyzed—you could be sued for millions. If you don’t have enough liability coverage, you still have to pay that, it doesn’t go away just because you say “Sorry, I’m not a millionaire.” Additionally, the average auto accident claim is around $27K—if you live in a state like Florida where state minimum limits are extremely low and have an ‘average’ auto accident, you’re probably going to have to pay about $20K out of your own pocket for someone else’s injuries or damaged property—that doesn’t include what you have to pay for your own injuries and car repairs or new car. State minimum is NEVER enough coverage, at the very least, go the next step up.
- Not Grouping Your Insurance Policies Together
One of the best ways to save money is to buy all of your insurance from the same insurance company. Having home insurance, car insurance, and any other insurance all grouped in with the same provider can easily save you 10% overall, if not more. Additionally, you’re receiving multiple bills, meaning you’re probably paying multiple installment fees. The average person has three insurance policies. The average monthly installment fee is $5. Over the course of a year, if you have those policies all with different carriers, that means you’ve paid $180 in installment fees—sometimes enough to even pay the premiums of one policy, like renters insurance.
- Not Reading the Fine Print and Not Asking Enough Questions
Somewhat related to the above point, if you don’t read the fine print, you won’t know what you’re buying. If you don’t know what you’re buying, then you don’t know what you’re covered for and if you need to buy additional insurance, or if you can cut some things out to save some money. To make sure that you’re getting the right coverage for you and receiving all of the discounts you’re entitled to, you have to ask questions. Ask about “teen” coverage, or special discounts for being accident free for ‘x’ amount of years, or having anti-theft devices in your vehicle.
- Not Getting a Re-Evaluation
In almost every circumstance, the older your vehicle, the less you’ll pay on your car insurance. If you have had the same vehicle for the past 10 years and haven’t had your insurance re-evaluated, it may be a good time to stop in and get one done. Life changes too—did you graduate from school? Get a new job? Start working from home? Have children? Buy a house? All of these can lead to major changes in your auto insurance premiums—and possibly cause you to have inadequate coverage.
- Not Getting It In Writing
For any quotes or agreements that you make with your insurance company, get it in writing. This includes any breakdowns of fees and what you’re receiving coverage for.
- Not Researching the Insurance Company
Not all insurance companies are created equal. Make sure you take the time to check out the insurance company you’re interested in to make sure that most of their policyholders are satisfied with the service they’ve received. It’s pointless to switch to a company for cheaper rates if their customer service sucks and if they have awful financial standing. Insurers want to know about the risks you present—find out about theirs.
- Not Taking Your Credit Rating Into Account
Many drivers forget that when they get insurance that the insurance company will be pulling a copy of their credit report. A drop in your credit score could result in a higher rate for you, so don’t take out any loans or make any credit card applications right before you plan on buying your insurance.