If you already have auto insurance, or you are looking to purchase a new vehicle, car insurance is a subject that numerous people would like to avoid. Hopefully, the insurance we buy is something that we will never actually have to use. Vehicle insurance policies can certainly be complicated, and it will be the decisions you’ve made when buying the policy that will impact the experience you have in the event of a claim. Sadly, several people make simple mistakes when acquiring insurance for their vehicle that can end up costing them in the long-run. The good news is that if you figure out these mistakes early, you can avoid grief later. Here are four insurance mistakes to avoid if you are asking yourself “What kind of insurance do I need?”
Buying Minimum Insurance Limits
Every state requires their drivers to carry a different minimum amount of liability insurance. Many consumers will try to save money on their premiums by opting to buy their state’s minimum liability insurance limits. Purchasing only the smallest amount of liability insurance coverage can expose you to larger expenses if you are found responsible for causing an accident that results in excessive damage. It’s a good idea to purchase higher coverage limits and avoid making the mistake of settling for just the state’s minimum required insurance coverage.
Carrying Lower Deductibles
Carrying lower deductibles may keep you from shelling out cash for minor damage to your vehicle. However, carrying lower deductibles will increase your monthly premiums. Tip: That scratch might be paid for by your insurance because of your low deductible, however, you’ll negate that by paying higher premiums over the long-term. In the event you make several smaller claims, you may find that your insurance carrier cancels your insurance and declines to renew your coverage. Rather, elect to carry a higher deductible and pay smaller premium amounts.
Opting Out Of An Umbrella Policy
Umbrella policies are designed to protect an insured in the event they are found liability for excessive damages. If you have a policy that has limits of 50,000 and you are found liable for damages. Your vehicle crashes into someone’s home and it causes 200,000 in damages. If in the event that you do not have an umbrella policy, you will be responsible for paying the difference with your own assets and future wages. This can be devastating to most people. Consider buying an umbrella policy to avoid a potential financial nightmare.
Failing To Review Your Insurance Annually
By far, this is the best way to save money. Just assess the coverage you have to make sure it is up to date. Your life is always changing and so should your insurance. Don’t put off taking the time to review your insurance. Compare the different coverage options available. This should take you no longer than one hour a year.
Insurance does not have to be hard. Just heed the information in this article and set up a time to meet with an insurance professional. Purchase more than the state minimums, increase your deductibles, get an umbrella policy and review your existing coverage to make sure it is up-to-date. You’ll save yourself cash and grief.