Do you need to purchase a new auto insurance policy, but you are not sure what you're doing? If so, it will help to know what mistakes that you may make when shopping around.
Mistake 1: Focusing On The Lowest Price
A common mistake that people make is focusing on paying the least amount possible for auto insurance. It's important to know exactly what you are buying, and simply going with the lowest quote can cause you to lose out on benefits that are worth paying a little bit more for.
For example, does the insurance policy come with towing service, and how many miles of towing is provided? Will you get a rental car while your car is being repaired, and what are the limits of the rental car coverage? These are things that you have to think about, such as the fact that lower premium could end up costing you more money.
Mistake 2: Not Getting Gap Insurance
Many people do not understand what gap insurance is and decide not to get it. Unfortunately, it's an important type of insurance that anybody getting a new car should consider. That's because your new car loses value as soon as you drive it off the lot, and your car insurance will only cover the depreciated value of the car if it becomes totaled. If you end up owing more on your vehicle than what it is worth, you still owe the difference with those auto loan payments. Gap insurance will fill in the gap and make sure that you are not underwater on your totaled vehicle.
Mistake 3: Getting A High Deductible You Can't Afford
One factor that is going to make a big impact on your premiums is your deductible, which is how much you pay before your insurance provider starts paying for repairs. While a high deductible can be a great way to save money, you need to make sure that you have the money on hand to pay for it.
If you do not have enough cash on hand in your emergency fund to pay for that deductible, then you need to have a lower deductible that you can actually afford. If not, you'll end up in a situation where you need to finally use your insurance policy and can't afford to do it.
Have questions about your auto insurance policy? Reach out to an insurance provider in your area to answer all the questions that you have.
Share18 February 2022
I bought my first car after I graduated from college. I was just about to become a teacher and needed a car to get me to and from work! I chose an auto insurance company my boyfriend used and stayed with them for many years. I always felt like I was paying too much for insurance, but I thought that was normal. One day a fellow teacher was talking about her auto insurance rate, and it was a fraction of what I paid! She told me that most companies offer discounts for teachers, and I soon learned that my company did not give me one. I switched to another company and now pay a lot less. I learned a lot about insurance during this time, so I decided to start a blog to share what I have learned to help anyone who needs the help!
