subject: 5 Mistakes to Avoid and 5 Tips for Buying Auto Insurance [print this page] 5 Mistakes to Avoid and 5 Tips for Buying Auto Insurance
In nearly every state, if you own a car, you have to carry auto insurance. That makes auto insurance one of the most frequently purchased financial products in the country, but that doesn't mean that people always understand what they're buying. If you're in the market to buy or switch car insurance providers, here are five mistakes to avoid to ensure that you get the insurance you need at a price you can afford.
1. Choosing auto insurance based on a clever television or newspaper ad. Never choose an auto insurance carrier without doing a thorough check to make sure it offers the best value for your money. Get multiple car insurance quotes from several different companies to compare rates and services.
2. Comparing insurance quotes that don't cover the same things. When comparing car insurance quotes, be sure that the policies you're comparing provide the same types and amounts of coverage. Don't choose a policy because it's cheaper unless you've compared coverage to be sure that the comparison is a valid one.
3. Paying for too much insurance. If you've paid off your car loan but you're still paying for the same coverage you had when you first bought the car, have an agent take another look at your coverage. Lenders insist that you carry enough insurance coverage to pay off your loan if the car is destroyed or stolen. Once the loan is paid off, you may be fully covered for far less cost.
4. Paying for too little insurance. In most cases, compulsory car insurance is nowhere near enough to protect you from unexpected costs in the case of an accident. Compulsory auto insurance is designed to cover your liability for damages caused by your vehicle to another person or another person's property in an accident. It won't be of any use to help you repair or replace your vehicle, and may not even cover your own injuries.
5. Assuming you're covered for things that aren't in your policy. Just because your cousin's car insurance policy covers car rentals doesn't mean that yours does. If you want a type of coverage, you have to select it and pay for it. Car ins extras include such things as glass or windshield insurance to cover breakage, rental insurance to pay for your transportation costs while your car is being repaired and roadside assistance to cover towing and other expenses incurred in a breakdown.
Here are five tips to help you get the most value for your vehicle insurance dollars.
1. Be sure to list all safety and security features on your vehicle when you ask for an automobile insurance quote. Many companies offer lower rates if you have a GPS system, an auto alarm or a car recovery system installed.
2. List off-street parking or a garage if you use one. Most insurers offer discounts if your car isn't parked on the street where it may be damaged in a fender-bender.
3. Re-evaluate your car insurance coverage at least once a year. The best insurance rates last year aren't necessarily the best rates this year. And life changes, like getting married, going off to college or retiring, can all impact the rates you pay for your auto insurance.
4. Make a realistic estimate of your mileage. Low mileage discounts can bring your insurance rates down even further, so if you only drive your car for short distances around town, make sure that you agent knows that.
5. Consider bundling. If you pay home insurance or life insurance, you may get discounted car insurance rates if you buy your vehicle insurance from the same company. You'll also pay lower rates if you insure more than one vehicle or more than one type of vehicle with the same company.
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