Like any type of insurance, auto insurance is something you pay for in the hopes of never actually needing it. But just because you're required by law to carry car insurance in most states doesn't mean you should pay more than you have to. In addition to shopping for quotes with different auto insurance agencies, there are plenty of other steps you can take to cut down on insurance costs without sacrificing coverage. And perhaps even more importantly, there are a few costly auto insurance mistakes you'll want to avoid.
Choosing a Too-High Deductible
Doesn't a higher deductible mean lower monthly rates? Yes, but a too-high deductible can come back to bite you. That's because if you end up in an accident or otherwise need to file a claim, your insurance company will require you to pay the amount of your deductible out-of-pocket before any additional coverage will kick in. If your deductible is higher than you can realistically (and comfortably) afford, you could end up in a lot of financial trouble.
Ask yourself if you would be able to easily afford your deductible in the event of a claim. If the answer is yes, then your current deductible is probably fine. If you're not sure, then it may actually make more financial sense to lower your deductible in exchange for slightly higher monthly payments.
Missing Out on Discounts
Car insurance companies offer a wide range of discounts to those who qualify, but most of them are not automatically applied to your policy because you need to prove eligibility. Take a look at your auto insurance agency's list of available discounts to see which may apply to you. Some common examples include:
- safe-driving discounts for accident-free policyholders
- good-student discounts for those in school part- or full-time
- discounts for those in certain professional organizations
Not Reviewing Your Policy Annually
Make sure you're not paying for more coverage than you need by taking the time to review your auto insurance policy at least once a year. For example, if you just paid off your car, you may no longer be required to carry full-coverage insurance on it. If you wish, you can save some money by lowering your coverage amounts. If you've experienced recent life changes, like getting married or moving, keeping this information up-to-date will also ensure that you receive the most accurate quote.
By avoiding these common (and expensive) car insurance mistakes, you'll be one step closer to securing the best possible rate on your coverage.
To learn more, contact a resource like the Germain Insurance Agency.