Article by Jack F. Grigorian of LA Car Insurance
Here are 5 mistakes to watch out for when getting a auto insurance. If you are not careful these can cost you a lot of money down the road.
1- Lying to Your Auto Insurance Company
Make sure you provide your insurance company with accurate information. Drivers often lie about who drives their car, what the car is used for and where it’s parked at night. You may think that fudging the facts in order to get a better rate is OK, but it could put your coverage in jeopardy if your misrepresentations come to light. Quick savings may come back to bite you.
2- Failing to Shop Around for AutoInsurance Quotes
You should review your auto policy every year. Most drivers, however, simply renew their policy without questions, failing to take the time to compare other insurers.
Only about one-third of all policyholders obtained an auto insurance quote in the past 12 months, according to a recent J.D. Power and Associates survey. Almost 70 percent automatically renewed their policy.
To make sure you still have proper coverage at the best price, we recommend you obtain at least three or four quotes when your policy is up for renewal.
3- Not Understanding What You’re Buying
Insurance companies have a reputation for offering products that their customers can’t understand. A recent survey found that insurance companies are at the bottom of its Brand Simplicity Index. In other words: We can’t figure out what we just bought.
Don’t wait until an insurance adjuster has to explain your policy to you after a crash. That only leads to rude surprises. Go over your policy terms and exclusions with your agent.
4- Ignoring Reputation
When you’re shopping around for the best car insurance rates, it’s important to make sure you don’t sacrifice customer service.
While you may pay a lower premium, the insurer could give you unreasonably low damage estimates or force you to pay more for manufacturer replacement parts. Before you buy a policy, investigate the insurance company’s reputation and the details of your policy.
The National Association of Insurance Commissioners’ website provides information on insurer complaint ratios.
5- Buying the Minimum Coverage
Many car owners buy the minimum liability coverage required by law and assume that they have adequate coverage. Unfortunately, in some situations, that’s not enough.
Christie Hyde, spokesperson for the American Automobile Association, recommends that you develop a good understanding of your assets and your financial risk in the event you became involved in a serious accident. If you have assets to protect, you should make sure your liability limits reflect what you’ve got to lose.
If you hit a high-end vehicle, the minimum coverage will not cover the cost of a new one.
Stephanie Sheppard, spokesperson for Allstate Insurance, says many consumers believe that they can save money by increasing their deductibles. While that is true, it becomes a problem if you can’t afford to pay your deductible after an accident.
Policy holders also drop collision and comprehensive coverage for older vehicles. But if you can’t afford to pay for costly repairs or buy a new car, it may be more prudent to buy the coverage. In an effort to save money, consumers may cut corners in areas that help protect them and their families and cut put them at risk financially.