The 4 Biggest Mistakes People Make with Car Insurance
If you’re like most people, when you’re shopping around for car insurance, your top priorities probably include the time it takes to just get it done and the amount of your monthly premium.
Given that your time and money are both limited, that’s normal. But many people put these considerations at the very top of the list and end up signing up for a policy that doesn’t do them any favors.
Sure, it only took 15 minutes and your monthly payment is less than a meal at a casual restaurant, but what happens when you get rear-ended in traffic or cause an accident that results in serious damage to someone else’s vehicle?
If you didn’t spend enough time making sure you have the right coverage, you could be in trouble. And you wouldn’t be the first – many people make mistakes when purchasing an auto insurance policy. But the good news is that with a little education and research, you can avoid those common mistakes.
- Only the Minimum
Each state has insurance coverage minimums to be able to legally drive. While it’s helpful to know what the minimum is, you shouldn’t stop there. In most cases, that minimum leaves you on the hook for a great many incidents you and your car may encounter. While the lowest possible coverage leaves you with a low premium, you’ll pay a lot more in the long run if something happens that your small policy doesn’t cover.
Spend time talking with insurance agents and go through several common occurrences one by one to see whether or not the minimum policy would help you. What if your car is damaged in a hit and run? What happens if your car sustains damage due to a weather incident? It’s critical to know the answers to these questions before you opt for minimum coverage.
- One Stop Shopping
You can try youi car insurance quotes online to get an estimate of what your potential rate could be.
Since many of us are so rushed in our everyday lives, it’s easy to rush through the insurance buying process and just go with the first quote you get. But there is a lot of variance out there from provider to provider, so the first place you call may not be the one who can offer you the best coverage at the best prices. It’s worth calling a few different companies and recording all of the necessary components of each offer (premium, deductible and coverage amounts) so you can compare to choose the best option.
- Lying to the Provider
It may be tempting for you to fudge the truth when it comes to trying to get the lowest prices and best coverage, but you shouldn’t. If you lie about what your car is used for, who drives it or any past legal issues you’ve had, you might get a cheaper quote on the spot, but the truth will likely come around to hurt you later.
If you’re ever involved in an accident and the insurance company uncovers mistruths you told, they could use these as grounds for not paying out. It’s best to be upfront about everything, get accurate quotes and avoid being abandoned by the company when you need them most.
- Not Understanding Your Policy
As an accident and injury attorney, I can’t tell you how many people have a very spotty and often inaccurate understanding of their own insurance policies. They get a rude awakening when they find out what they actually signed up for and regret not spending more time digging into the details of their policy before it was too late. Here are the factors you should always know and consider when making your decision:
- Premium – How much will you pay per month or per year for your insurance policy?
- Payments – Can you pay one lump sum annually or biannually at a cheaper rate than monthly payments?
- Deductible – What will you pay for repairs before the insurance kicks in?
- Rental Car – Does your policy cover your rental car costs while your car is being repaired?
- Bodily/Injury Liability – Does the policy protect you if you cause an accident that injures other people?
- Property Damage Liability – What’s the coverage if you cause damage to another person’s vehicle or property?
- Uninsured Motorist Liability – Will you be covered if you’re in an accident that was caused by an uninsured or underinsured driver or someone who hits and runs?
- Personal Injury Protection – What is the coverage if you or your passengers are injured in an accident?
- Collision Coverage – Will your policy pay for repairs to your vehicle in the event that you collide with another car or an object such as a tree?
- Comprehensive Coverage – Does the policy cover damage to your car that’s caused by theft, vandalism, weather, animals or falling objects?
Although you might want to get the insurance buying process finished as quickly and as cheaply as possible, you should know that this is a serious and important decision that deserves your time and smart investment.
It’s much better to spend a few hours and a little extra money on making sure you have a good policy that you fully understand than to deal with the costly repercussions of getting into an accident without the proper coverage.
But if you are ever in accident and feel that your insurance company is not living up to their end of the bargain, you should contact an attorney who is experienced in dealing with accidents and insurance, as they may be able to help protect your rights and your bank account.
About the Author: John Zaid is a Houston car accident lawyer and the founder of Zaid Law, a personal injury law firm with two locations in Houston. He is passionate and committed to advocating for his clients and educating people about their rights under the law. John also enjoys sharing his expertise on a variety of auto and legal blogs. For more info, visit www.Zaidlaw.com.