Insurance is a tricky subject. With all the unique insurance terminology, the differences in how different types of insurances work and more, it’s not uncommon to get tripped up in one of the common auto insurance mistakes when buying coverage for your vehicle.
The best way protect yourself and your vehicle from gaps in your insurance is to know the most common auto insurance mistakes and how to avoid them. Read on to learn about typical errors that vehicle owners make when applying for insurance.
Not Asking Questions
Like most parts of life, the one number auto insurance mistake to make is to stay quiet when you don’t understand something. When you apply for auto insurance, the agent you work with will have a lot of information to give you, and a lot of information needed from you. All of these details are incredibly important. They can impact your premium, your level of coverage and the specific types of damages your insurance will cover.
At every step of the process, if you have a question, ask it! Beyond its necessity for legal driving, auto insurance is something that you may only think about again if you unfortunately do experience a crash or other accident. When you’re reeling from damage to your vehicle and potential injuries sustained, the last thing you want to do is start second guessing what your insurance covers.
Assuming Everything Is Covered 100%
Auto insurance is a blanket term that describes a suite of different coverages for your vehicle. Some of them are considered standard, some of them are required by certain states and some of these coverages are completely optional.
The first mistake is to assume that your standard auto insurance covers all incidents. Simply put, it won’t. Common basic auto insurance packages offer some liability coverage when you’re in an accident with another vehicle. But what if a tree branch falls on your car? Without comprehensive auto insurance, you’ll be on the hook for that one!
Likewise, things like theft or even bodily injury coverages are all subject to various aspects of your policy. In some cases, you may need a special type of additional coverage to have any assistance from your insurance company. In other cases, you can choose the level of coverage.
Cheaper coverage saves you on your premium but means your insurance company will set a lower cap on the maximum amount they will cover when you make a claim.
Going with State-Minimum Requirements
You get what you pay for! You’ve likely seen commercials online and on TV that advertise the cheapest insurance rates in your state for auto insurance that meets the minimum state requirements. While it’s true that these companies allow you to meet the minimum standards of insurance to legally drive in your state, that’s about all they will do for you.
Minimum coverage for auto insurance tends to put the focus on your liabilities for others during an accident. While it will help mitigate your liability if you cause an accident, it won’t help mitigate the costs of repairing or replacing your vehicle beyond the bare-minimum.
Protecting you from liability is a core part of insurance, but great insurance policies help you keep your life from going off the rails following an accident. If you don’t have coverage to help repair your vehicle, you may struggle getting to work or going to the store. Unexpectedly losing access to your vehicle can upend your life, even if only temporarily.
State-minimum insurance may make sense in some unique cases, but for most people, it will leave you underinsured for common risks. Pay attention to what these policies do and do not help with, and make sure you protect yourself!
Forgetting to Update Your Policy
It’s a common auto insurance mistake to assume your auto coverage exists in a vacuum. Your premium and coverage are more than just your make, model and driving history. If you recently purchased a home, or moved closer to your job, you may be able to lower your premium!
Likewise, if you’re putting more mileage on your vehicle as a result of a change in your home or lifestyle, you need to report these changes to your insurance company. If you claim that you only drive an average of 10,000 miles a year, keep in mind that your odometer will be checked at any claim. Your insurance company may have some questions for you if your car has 40,000 new miles on it after a year when you make a claim!
Going with the Highest Deductible
Getting the most out of your coverage means choosing a deductible that makes sense for you. If you’re not familiar with deductibles, it’s a price you have to pay prior to your insurance coverage kicking in. Common deductibles for auto insurance can be $500 or $1,000, though there are many other options available too.
If you have a perfect driving record, a high deductible may make sense. You’ll pay more when making a claim, but the high deductible saves you on your premium. However, if you’re accident prone (or maybe putting a new teen driver on your insurance) then a lower deductible could save you thousands throughout their driving career.
It’s always tempting to save money, but it’s only a savings if it works out according to plan. Low deductibles increase your premium but can reduce direct costs when you do need to make a claim. High deductibles save you on premium but could make certain claims not worth it due to the overall costs being so close to the deductible.
Contact Iott Insurance for a Quote Today
Iott Insurance has been a part of southeast Michigan for over 50 years. We can help you plan your insurance needs and find you the right policies or plans to protect you.
Or you can visit one of our three offices in southeast Michigan:
Blissfield, MI – (517) 628-4574
Lambertville, MI – (734) 807-3825
Petersburg, MI – (734) 215-9884
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