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7 Mistakes to Avoid When Buying Automobile Insurance

Buying automobile insurance can be a hassle, especially if you're new to the process. Many automobile owners make costly mistakes because they simply don't know how to approach insurance companies and what to expect. Some insurance agents will look out for you to be sure you get the best possible coverage at the best price, but don't bet on it. Be informed before you go shopping for insurance - you'll save time and money. Here are seven common mistakes to avoid when buying auto insurance online or off-line.

Mistake #1: Failing to Compare Coverage Types and Policies

Automobile insurance varies from one policy to the next. There are many types of coverage that you can purchase and each provides a certain umbrella of protection for different circumstances. Never jump to conclusions when obtaining online insurance quotes, but examine each offer based on the type of coverage available. An example would be a quote that includes both liability and collision insurance versus a quote that includes liability only. The policy with liability only will obviously cost much less.

Mistake #2: Thinking Cheapest is Always Best

The cheapest car insurance is not always best. You should be careful about choosing auto insurance based solely on price. There are many "fly-by-night" companies or start-up companies that never make it. They might promise very low premiums today, but that doesn't really matter if the company goes out of business soon. This is not to say you can't get great bargains on car insurance, but just to be mindful of the scams and companies that make unrealistic promises. Stick with larger companies that have been in business a while with a known reputation for great service.

Mistake #3: Buying Too Little Coverage

Don't make the mistake of buying too little coverage, especially when it comes to liability insurance. Liability coverage protects you in case you cause an accident that harms another's vehicle or their health. Car repairs and medical expenses can be very costly. Even if you have to pay a little more to get extra liability, you'll be glad you did should this type of accident ever occur.

Mistake #4: Forgetting to Pay Your Insurance Bill

If you forget to pay your automobile insurance bill or if you are late for any reason, this could cause your premium to increase for the next year or even a few years. It can also cause your policy to lapse, which means you'll possibly have no coverage during this period of time. This is a dangerous situation to be in. To avoid it, set up billing on automatic payments if possible or make paying your insurance a top priority when the bill arrives!

Mistake #5: Assuming Coverage

Never assume that anything and everything is covered when purchasing auto insurance, whether online or off-line. Ask what's covered before signing a policy. Remember that theft, weather damages, fire damage, and other mishaps or acts of God are usually covered in a comprehensive policy. Comprehensive policies often will cover everything under the sun - no matter what the cause. These can include hail, flooding, riots, explosions, glass breakage, falling or flying objects, windstorms, etc.

Mistake #6: Failing to Notify Your Agent of Important Changes

If you add a driver (such as your teenage daughter or son), have a minor or major accident, or sell or trade a vehicle, you must notify your agent of these changes. These can affect your insurance premium, and it's also required by law to add a child to your policy when they obtain a driver's permit. Also, don't forget to notify your agent of positive changes that could result in a driver's discount, such as upgrading your car with safety features, getting good grades in school (for teen drivers), taking a defensive driving course, etc.

Mistake #7: Not Shopping Around

Don't just buy the first car insurance policy you come across. Do an automobile insurance comparison using online tools or visit several local insurance agencies to compare policies and pricing. Even if you buy car insurance online, look at all the options before making a decision. Shopping around can save you thousands of dollars over the years, and can even make it possible to secure additional coverage that you might need later on down the road.

No matter which company you choose, always get everything in writing before making a commitment. Never make a decision right away. Take home the materials, read them over, and maybe even consult with someone that knows a lot about insurance before taking that final step. Avoid these automobile insurance mistakes so you can get all the coverage you need to fit your budget.

by Candice Pardue

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