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Sadly, when it comes time to make a claim, finding out that you’re not properly covered can happen. It stings, and hurts – like a stab in the back, and in the bank. There are some instances where insurers won’t pay out claims. Putting thousands of people at risk, if they could have just read the small print. Here are several car insurance mistakes you can avoid.
1. Insurance Minimums
Each state sets a minimum amount of auto coverage, according to an amount they deem fit. It is a grave mistake to think that this insurance minimum is adequate coverage, and relying on this minimum alone is financial suicide. (Even worse is to think that it’s a strategy for saving money.) This is because, should an accident ever occur, this minimum doesn’t help you all that much when you need the money most. Repair costs may come out of your pocket directly.
2. Help From Others
Many new drivers (especially young ones) are an insurer’s dream – because motorists under 25 have been shown to be involved in more accidents. This is why premiums for those under 25 is always significantly higher than those over the age. That’s why it’s a popular thing for parents to name their children as one of the named drivers on their own policy. Which, unfortunately, is illegal – and can result in thousands of dollars in fines.
3. Not Shopping
How many people do you know think that all insurance companies (and their policies) are the same? No two companies, services or policies are the exact same, no matter how similar they may seem. Carrier A may offer SR-22 Insurance quotes, which are vehicle liability insurance documents for high risk cases – and carrier B may not. So choose insurance company wisely.
4. Not Reviewing Policy
Your insurance provider may not always catch changes made to your changing circumstances. In the end, your plan won’t accurately reflect shifts that were made to your coverage during this time. When mistakes are found in your policy, flag them and bring them to your insurance provider.
5. Past Obsession
Leaving off insurance claims and motoring convictions from policy applications is a great way to secure a cheaper quote – which saves you money. Unfortunately, this is car insurance fraud. Insurers that catch on to frauds and liars are not liable to pay claims that those frauds make. This means you will receive nothing when you file a claim.
6. Misunderstanding Coverage
It is worth your time to do all the research you can on the coverage you have – and not to opt for the coverage that sounds nice, but you ultimately don’t need. Therefore, it’s a wise move to contact a company representative. They’ll walk you through the steps you need to find how much coverage you might want to buy, and whether you can afford it or not.
At the end of day, insurance quotes are partly based on the performance of vehicles. Powerful engines are more expensive to insure, because the chances of them being in an accident are higher. The same is with modifying your vehicle: any modifications that improve its bottom-line or value (such as an updated chassis, tires, etc.) must be reported to your insurer. Otherwise, your policy can and will be declared invalid.
Now that you know what common costly car insurance mistakes you can make, don’t make them. There is much more you can do to protect yourself from making costly mistakes. Remember: nobody is responsible for choosing your auto insurance but you.