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Top 10 Car Insurance Mistakes to Avoid

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If you drive a vehicle in Massachusetts, you’re required to have a car insurance policy. The coverage you choose will likely depend on many factors. Yet, certain choices you make can leave you underinsured or over-budget. Your vehicle is an important investment. Protect your car and the individuals inside by learning the facts about car insurance coverage and avoiding these common mistakes.

Not Knowing How Much Car Insurance Coverage You Need

Some car owners base their coverage on the minimum requirements of the state. However, this may not be enough coverage to keep you adequately protected. Conversely, drivers who insist on paying for full coverage could be making a mistake as well. Paying for coverage you’ll never use simply doesn’t make sense. The unique factors that help determine how much insurance you need include:

  • Driving experience
  • Vehicle type and age
  • Value of your vehicle
  • How much time you spend behind the wheel
  • Your local driving and weather conditions

Stretching the Truth on Your Application

While it’s true that a clean driving record is attractive to insurance agents, lying on your application can leave you without any insurance at all. It might be tempting to try to save money by failing to disclose former claims or how many people drive your vehicle, but those lies can have major consequences. Insurance companies will access your driving record and can reject your application for your dishonesty. Even worse, if the inconsistencies aren’t revealed until you attempt to file a claim, your insurer can deny your claim and cancel your policy. Many companies won’t be willing to insure you if they see a cancellation on your record, leaving you with minimal choices to remain insured.

Failing to Shop Around For a Car Insurance Policy

All insurance companies provide insurance coverage, but they are not all the same. Furthermore, since your insurance coverage needs and costs are based on your unique circumstances and lifestyle, the company that provides good rates for your neighbor may not yield the same results for you. Shopping around for insurance coverage ensures you get the best coverage for the best prices in your area. Choosing an independent insurance agency can help you compare rates without visiting several different companies.

Delaying Your Policy Updates

When the drivers in your family shift and change, you need to update your policy to make everyone in your household is insured. Life is busy, and it’s easy to procrastinate or forget to add a new driver to your policy. Unfortunately, if an accident occurs before you update your insurance, you’ll be underinsured. Most often, the result is a denied claim, but like lying on your application, it could lead to a cancellation.

Making a Poor Deductible Choice

A high deductible usually leads to a lower monthly payment, while a lower deductible means you’ll be paying more each month. Choosing a high deductible is tempting for most drivers, but it can mean you don’t have the money for repairs when an accident does occur. A good rule of thumb is to avoid choosing a deductible that you couldn’t afford to pay right now. On the other hand, it doesn’t make sense to choose a deductible that pays out more than your car is worth.

Skipping Research

Shopping for car insurance can be an overwhelming process. If you arrive at an insurance agency unprepared, you may find yourself digesting more information than you can understand. Most insurance companies have websites that will allow you to get quick quotes or estimates online. This can streamline your shopping process and allow you to quickly narrow down your choices. When you visit the local agency of your choice, you’ll already know the approximate amount you’re expecting to spend. As a bonus, when you research companies online, you can learn from the reviews of existing or former customers.

Settling for Minimum Coverage

Statewide minimum coverage is designed to protect individuals injured in a car accident. Other minimum limits typically relate to ensuring your lender is paid in the event of an accident. Neither of these minimums is enough to get you back on the road in the event of a total loss. Most drivers don’t realize that liability coverage is designed to protect other drivers on the road that are hurt if you cause an accident. This means minimum coverage often won’t provide coverage for your medical bills if you or your passengers are injured. In fact, it’s often not enough to cover the other driver in the event of a serious accident with considerable injuries.

Buying Too Much Car Insurance Coverage

This one may come as a surprise, but it simply doesn’t make sense to pay more for insurance than your car is worth. Some insurers advertise aggressively to tempt drivers into spending more money for coverage. The truth is, no matter how much coverage you purchase, your claim will never pay more than your vehicle is actually worth.

Not Asking Questions

car insurance agent meeting with a couple
Couple working with an insurance agent.

Failure to understand your insurance policy is one of the biggest reasons car owners are underinsured. Most people who don’t work in the insurance industry don’t understand all the terms associated with a policy. When it comes to understanding your insurance coverage, there truly are no stupid questions. If your insurance agent is reluctant to take the time to answer your questions, it’s probably time to find a new insurance company.

Failing to Seek Discounts

There are many ways to save on car insurance. Just like the factors that determine the amount of coverage you need, the factors that make you eligible for discounts are unique. Multi-policy discounts, accident-free discounts, student discounts, and safe car discounts are only a few examples of ways to save money on insurance. Your eligibility can change when you make lifestyle changes. It can also change due to new options from your insurer. Each year when you update your policy, you should take a moment to discuss potential discounts with your independent insurance agent.

Learn More About a Car Insurance Policy

Auto insurance is necessary to keep all drivers on the road safe. While it often seems expensive, driving without coverage is more expensive in the long run. Avoiding these common mistakes saves money on your insurance coverage and ensures you have the coverage you need.

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