Shopping for Auto Insurance? 10 Most Costly Mistakes People Make

When shopping for auto insurance there are many ways to save money. The following are 10 simple questions to ask that, if not asked, can be very costly. The only thing you risk if you don’t ask is a higher premium.

1. Are there other deductible options that are cheaper? A very costly mistake is choosing a deductible that doesn’t benefit your risk level. For a more complete analysis, refer to my previous article on How to choose a deductible. For example, if you have a low deductible with few or no claims, you are paying a higher premium for that deductible level than if you had a higher one. Why pay it if you rarely, if ever, have claims?

2. Do I really need all these coverages, and what do they cover? Don’t buy coverage that you don’t need. Check your health insurance policy coverage. If you have health insurance you may not need to purchase med-pay. Additionally, if you have roadside assistance through a credit card or other provider such as AAA ,then you don’t need to purchase roadside assistance coverage on your auto insurance policy.

3. Are there any discounts through my work or a trade groups? Sometimes insurance companies will offer specific discounts to people in various professions or employers.

4. How do your rates compare to your competitors? When you shop for auto insurance, check with more than one agent or insurance company. Comparing auto insurance is smart: if you only look at one carrier or source for your insurance quote you may end up paying more than necessary.

5. Do I need to have everyone I live with listed on my policy? Don’t pay for household members who don’t drive your vehicle. Your policy application asks for all drivers close to, or of ,driving age. If some or all of them don’t drive the vehicle(s) being insured, exclude them from your policy.
 
6. Is there a multi-policy discount available? If you have other insurance policies such as: life, health, home, renters, condo, or motorcycle, check with the carrier(s) with whom you have your other policy. See if you qualify for a multi-policy discount if you obtain your auto insurance through them.

7. Does the policy coverage transfer if I rent a vehicle? Make sure that it does. When you rent a vehicle you will need to obtain additional insurance for rental coverage if your policy does not transfer. This additional insurance adds up quickly and can be quite expensive, commonly upwards of $20.00 per day.

8. What are my payment options? Can I pay monthly? Quarterly? In full? Most insurance companies charge a fee when you pay your policy in payments. Monthly is usually the most expensive. See if there are other payment plans that will cost you less.

9. Do I need to cancel my old policy or will you do that for me if I purchase my policy from you? If you decide to change insurance companies, don’t forget to cancel your old insurance policy. It sounds like common sense, but in this busy day and age, people often forget to cancel their existing policy and end up paying for both policies when they don’t need to. Some agents or insurance companies will do this for you, but it is not common.

10. Are there any issues with my credit that may affect my rates? Check your credit report and clean up any discrepancies or issues. Several states use your credit report to assess risk and a person with a better credit score will typically save some money.