Many states require a minimum of liability auto insurance, but selecting the right auto insurance policy is essential if you want to protect yourself financially. Most people want the best coverage possible while also staying within a budget. Unfortunately, purchasing the right auto insurance isn't always easy. If you're in the market for a new auto insurance policy, avoid the following mistakes:
Buying From the First Insurance Company That You Contact
There is no strict formula for establishing the price of auto insurance premiums, so the price of an auto insurance policy can vary greatly from one company to another. When you want the best coverage at a price that you can afford, it is in your best interest to request quotes from several different auto insurance companies before you actually buy a policy. Doing so will give you the peace of mind of knowing that you have adequate coverage but are not overpaying for your policy.
Only Considering Price
While gathering quotes for an auto insurance policy, it is never a good idea to automatically purchase the one that is the cheapest. You need to carefully compare policies and understand the terms of the coverage provided. An insurance company may offer the lowest premiums, but when you read the fine print, you may notice that the cheapest policy offers a lot less coverage than policies that may cost just a little bit more.
Choosing the Lowest Deductible
An auto insurance deductible is the amount of money that you have to pay out of pocket before the insurance company will contribute funds towards making repairs or replacing a vehicle that is stolen or totaled in an accident that was your fault. Many people make the mistake of choosing the lowest deductible amount available, which can significantly increase the price of your auto insurance premiums. Most people don't have to make auto insurance claims very often, so you are better off choosing a higher deductible, keeping the deductible amount in a savings account, and paying lower premiums.
Failing to Be Truthful on Your Auto Insurance Policy Application
When getting quotes online, most auto insurance companies will ask questions about your driving history. It is never a good idea to fail to mention traffic tickets, past accidents, DUI convictions, or other issues that typically affect auto insurance rates. Almost all auto insurance companies will check your official driving record before your application is officially approved, so not being truthful can either lead to much higher rates or a decision by the insurance company not to insure you.