11 Mistakes People Make When Shopping for Auto Insurance

Fran Majidi
July 20, 2018

Shopping for auto insurance is an important task. We use our car to get to work, to shop, as entertainment and so much more. Auto insurance helps protect this very important asset from unanticipated accidents and damage. For some of us, our auto is one of the most expensive thing we have ever purchased. When we shop for insurance, we should take our time and make sure that we are making the best possible decision on the insurance company and the type and amount of coverage we select.

The following are 11 mistakes many people make when they shop for insurance. We should all seek to avoid making these in the future.

1. Don’t ask about discounts.

Most insurance companies offer a wide variety of discounts. These discounts range from safe driver to membership discounts and so much more. It is very important to ask about discounts before you get your initial quote and even after, just to make sure that you obtain every discount that you might be eligible for.

2. Don’t obtain multiple quotes.

The only way to make sure you are getting the best coverage and rate is to get quotes from multiple companies. There are many auto insurance companies and you have a lot of options available to you. It is important to obtain multiple quotes, for the same level of coverage, so you can compare comparable rates and coverage. A very simple way to do this is to get quotes from an independent agent that works with multiple carriers.

3. Don’t bundle with other insurance policies.

Insurance companies like to give discounts when you have multiple policies with them. If you have renters or homeowners insurance, you should check with those companies and their rates when you begin your shopping process. You should also not be afraid to move your other policies to another company, if you can obtain better coverage at a comparable rate. While it may take some effort, the savings you may receive or better coverage, will be worth the effort.

4. Don’t ask for referrals from friends and family.

It is important to ask your friends and family for insurance referrals. They may know your situation and may be able to recommend a company that can meet your needs better than others. They may also be able to recommend an agent that will work with you to understand your needs better than another.

5. Don’t tell truth about driving record.

It is really important to fully disclose your driving record when you are seeking to obtain an accurate quote. When you don’t do this, later when the insurance company verifies your record, your premium may increase. Ticket and driving record databases are tied into most insurance companies, so it is almost impossible to keep this information from your insurance company. Most insurance companies also have access to ‘out of state’ driving records.

6. Don’t tell truth about miles driven each year.

The number of miles you drive every year will impact your premium. It is critical that you tell the truth when obtaining a quote for insurance. Insurance companies are now verifying this information and when they do so, your premium may later increase.

7. Don’t consider the amount of their deductible and how they would pay.

Some consumers will seek to obtain insurance with the highest possible deductible to minimize the amount of their insurance premium. The challenge with this is it assumes you have the money to pay the deductible, if you have to file a claim. If you do not have this money, you may have to take on debt or defer repairing your car.

8. Don’t ask their auto lender the amount of coverage they require.

If you have a note or loan on your car, you may be required to have a minimum level of coverage. This level of coverage is usually in your promissory note or lending paperwork. If you do not obtain this level of coverage, your lender may obtain it on your behalf and make you pay it. It is almost guaranteed that the cost of this coverage will be higher than what you could get on your own.

9. Don’t consider smaller insurance companies or carriers.

We all know the companies that are spending millions on branding in TV, online and radio commercials, while these companies are some of the best companies. However, there are also smaller insurance companies that can offer comparable high quality coverage. As you are seeking to obtain quotes, you may find that smaller companies can provide you with high quality coverage at a competitive rate. To find these smaller companies you can go online or even work with an independent agent that may represent some of these companies.

10. Don’t give themselves enough time to shop.

Some insurance shoppers wait until the very last minute to shop for new insurance coverage. They will wait until a day or two before their policy expires or after it has already expired to start shopping. This is a big mistake. To obtain the best coverage for the rate you are paying, it is important to give yourself at least 2 weeks or more. This time will allow you to compare different options and make sure you are getting the best coverage for the rate you are paying.

11. Don’t negotiate or see what incremental changes can do to change rate and/or coverage.

Sometimes a small change in the coverage you are quoted on can result in much better rate or conversely you might be able to get significantly better coverage for a small increase in your rate. You will want to work with the person putting together your quote to understand how small changes can impact your rate and coverage, so that you can make the best decision possible.

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