Whether it's your first time purchasing car insurance or you're looking for a new policy, there are many factors to consider as you weigh your options. Navigate the car insurance market like a pro by avoiding these four common mistakes.
1. Not knowing what you're looking for
If you're in the market for a new car insurance policy, it's important to consider your needs before you begin shopping. Blindly entering the process of obtaining quotes can be confusing if you're unsure what you need. Remember, each state has minimum coverage requirements for auto insurance that every driver in the state must have. However, just because you carry your state’s required coverages doesn’t mean you’ll be sufficiently protected following an accident.
Each person's car insurance coverage needs will vary depending on their specific situation. To help determine which auto insurance coverages make sense for you, consider the following questions:
How expensive is my vehicle?
What is my driving experience?
How frequently do I drive my vehicle?
What are the weather and road conditions in my region?
How far do I drive in an average week?
Of course, you'll also need to consider your budget for car insurance. Choosing a plan with more coverages or higher limits will usually mean a higher car insurance payment. As you shop for car insurance, balance the benefits of coverage with the cost of the plan.
If you're unsure of policy details or what coverage you might need, give us a call. Our insurance agents are ready to help.
2. Lack of knowledge about car insurance
Many shoppers struggle to understand the insurance industry. Auto insurance terminology can be complex for those not familiar with it, making it a frustrating task to compare policies.
When comparing car insurance policies, remember that not all plans offer the same benefits and coverage. Consider aspects like deductibles and coverage levels to accurately compare prices. If a price seems excessively low, chances are it only meets the minimum state requirements—potentially leaving you vulnerable to costly out-of-pocket expenses.
Check out this guide on how car insurance works.
3. Ignoring your credit and driver history
When you’re seeking car insurance quotes, drivers often forget their credit histories may play a role in the car insurance rates they receive. If your credit score is very low, there's a chance your quotes may be slightly higher than someone with excellent credit. Additionally, insurance carriers often use something called an insurance score, which, similar to a credit score, is based on financial responsibility, such as paying your bills on time. Better insurance scores are often correlated with lower insurance premiums.
Furthermore, your driving history matters. As insurance providers gather information for quotes, they can access information such as moving violations and past accidents you’ve been involved in. If you don’t honestly answer questions on your quote application, insurance companies can typically still find out the truth about your driving history using DMV records.
Before spending too much time researching auto insurance providers, you may want to check your current credit score. You can use free websites like CreditKarma, which pull from all three major credit score agencies. If your credit score isn’t quite where you want it to be, don’t worry—there are ways to help improve it, including consistently making your auto insurance payment on time.
4. Not considering your financial and vehicle situations
After consideration of your driving situation and coverage needs, select the best car insurance policy that you can afford. Choosing the coverages that make sense for you—both financially and situationally—can help reduce stress, hassle, and even some expenses if you need to file a claim.
Insurance providers may offer discounts for various factors, such as maintaining a clean driving record, participating in defensive driving courses, bundling multiple policies, and installing safety features in your vehicle. Take advantage of these discounts to help lower your premiums without compromising on essential coverage.
If you don't own a car but occasionally need to borrow one, consider purchasing a non-owner policy. This type of insurance provides liability coverage while driving someone else's vehicle that you don’t have regular access to, helping to protect you from financial responsibility in case of an accident. Non-owner policies are typically less expensive than traditional car insurance plans, making them a cost-effective option for occasional drivers in very specific situations.
By carefully considering your driving situation, selecting appropriate coverages, and taking advantage of available discounts, you can find a car insurance policy that meets your needs and fits your budget. Remember, car insurance isn’t just about protecting your vehicle—it's about safeguarding yourself financially in case of unforeseen events on the road.
Ready to take the next steps and purchase a car insurance policy? We can help you find affordable car insurance without cutting corners on service and quality coverage. Get a quote today to see for yourself.
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*Data accuracy is subject to this article's publication date.