3 Auto Insurance Mistakes That Could Cost You Money
As a car owner, you want to make sure you get the insurance coverage you need without overpaying. Unfortunately, in an effort to save money, some car owners end up making costly mistakes with their coverage. If you are in the market for insurance, here are some mistakes that could negatively impact your bank account.
Opting for the Minimum Coverage Required
One way that some drivers try to save on coverage is by only opting for the minimum coverage required by state law. Although it might seem like a sound strategy, it could actually backfire. If you never have a need to file a claim, you could save. However, there are no guarantees.
In the event that you have to file a claim or you are involved in an accident that is your fault, your insurance might not be enough to pay for the damages. At that point, you will have to pay out of pocket. If you were in an at-fault accident, you could even end up in court after being sued by the other driver.
Failing to Understand Your Coverage
Before settling on a plan, you need to understand everything that it does and does not cover. Unless you absolutely understand the plan, you could inadvertently end up buying coverage that will not meet all of your needs.
For instance, if you did not properly review your policy, you might not know whether or not your plan provides the actual cash value or replacement cost for your car until after you have to file a claim. There is a tremendous difference between the two that could prove costly for you.
Hiding Information from the Insurance Company
Although it might be tempting to hide some information from the insurance company, doing so could have serious consequences. One possible consequence is that, after the insurance company checks your background, it could make an adjustment to how much you have to pay. The company could even cancel your policy and leave you without coverage.
To get the fairest estimate of your premium, be upfront with the insurance company. Remembering to disclose information, such as citations and additional drivers, will help to ensure you get the coverage you need.
An auto insurance agent can help you identify and avoid other costly mistakes that could result in a significant increase in what you pay for coverage. He or she can also help you determine the level of coverage needed so that you can be covered for every situation.