4 Mistakes People Make When Buying Car Insurance

Auto insurance is just one of those things that you need to have when you buy a car. Convenience might lead you to call up your bank and make a quick and easy coverage decision, but you might want to give that choice more than a minute’s consideration.

Take your time when buying car insurance and sidestep these cock-ups before making a decision. Here are 4 mistakes that people make when buying car insurance:

Keep Your Insurance Company Current

A couple years ago, I bought a second-hand car from a dealership. The salesman made mention of some slight hail damage on the roof of the car but I didn’t give it a second thought.

Unfortunately, I forgot to mention the hail damage when I was buying car insurance. I was rear-ended a few months later and the insurer discovered the prior hail damage. The car was deemed a write-off but the insurer only paid out for the accident. We were stuck with $5000 left on our car loan because of that mistake.

Always tell your insurance company about any changes to your situation – new drivers, vehicle damage, car upgrades – because it might affect your coverage.

Get Enough Coverage for Your Car

It’s tempting to try and save a few bucks when you are buying car insurance coverage, but this isn’t the place to skimp – especially if you’ve paid a lot for your vehicle. While you might be able to save some by passing on windshield coverage, you’ll want collision and theft/vandalism options on your insurance.

Cars are made to crumple when there is a collision, so it only takes a small fender bender for the damage to get really expensive. Someone taps your back bumper and before you know it, you’re making your first claim and realize you don’t have collision coverage.

Even worse, you might find out the other driver doesn’t have insurance and you’re stuck with the repair bills. It’s always best to pay the extra and be covered when something happens.

Pay Your Insurance Premiums on Time

This isn’t one of those payments that you want to play fast and loose with. You risk more than a ding to your credit when you’re late with your premium payment. Missing payments on your premium means you risk coverage when you might need it most. Don’t take it for granted that your insurance will continue your coverage.

In addition to opening yourself up to a cancelled insurance plan, you may actually have a hard time getting new coverage if you already have a lapsed policy on your record. Set up pre-authorized payments to ensure there are no interruptions in coverage.

Know Your Policy and Be Protected

You don’t want to get caught flat-footed when it comes to your coverage. Knowledge is power when it comes to buying car insurance. If you think you’re covered for theft but you’re not sure, give your insurer a call and double check.

Signing on the dotted line is a commitment so make sure you know the details of your policy before settling on your choice. Knowing you’re covered will give you peace of mind when you’re dealing with a collision that might cost you thousands of dollars.