A big part of owning a car is maintaining the insurance policy on it. Depending on how much you drive, the insurance could be one of the biggest expenditures that people will make pertaining to their vehicles. And as many sites have shown, no plans are created equal, and there isn’t a good one-size-fits all approach. Buyers will have to shop around to find a plan that suits them.
That being said, there are a few common mistakes — or missed opportunities — that many insurance plan buyers make. In order to land your business, insurance companies tend to try and out-discount each other to offer a better deal, and as a result, the consumer benefits. However, it pays to be aware of these things, or you won’t necessarily be made eligible.
Insurance resource CoverHound created this handy infographic to lay out some common mistakes that people make, which result in them having to pay more for coverage than they would ordinarily. For your convenience, we’ve laid out the steps after the jump.
Choosing too-low deductible
Low deductibles can be exceptionally appealing — in the event of a significant crash, a lower deductible means less that comes out of your pocket before the insurance coverage kicks in. However, CoverHound warns that choosing a deductible that’s too low will result in premiums that are higher than they need to be, and overall, the balance won’t work out in the driver’s favor. By deciding on a threshold for your deductible in the event that you’re in an accident, you can avoid paying excessive premiums in the meantime.
Not taking advantage of discounts
Different providers will offer different discounts, but overall, there are many common opportunities for drivers to save money. Virtually every competitive provider in the U.S. will offer discounts for things like good grades, a clean driving record, and defensive driving courses, but you should check with your agent to find out if there are others that you might be applicable for. Here are some of the most common ways to save money:
- Good driving record
- Good student discounts
- Defensive driving courses
- Bundling plans (home, auto, motorcycle, etc.)
- Specific safety features (such as airbags, anti-theft systems, daytime running lights, backup cameras)
- Low-mileage driving
Sticking with the same plan
Moving to a new plan after a significant life event or a long duration without an incident could help you save money, as an outdated plan may not recognize your new status — whatever it might be. Maintain a good relationship with your agent, and occasionally ask if there’s a more ideal plan that you might be able to take advantage of.
Choosing monthly payment plans
This can be a bit of a tricky scenario for those who are living from paycheck to paycheck, and build their car insurance into their monthly expenses. However, if you are able to accumulate enough to pay off your premiums in one swing (or two, as some providers will charge on a six-month basis), you may be able to save money overall, by 5% to 10%, CoverHound says.