Car insurance is a fact of life for drivers, but even people who are experienced behind the wheel slip-up when choosing their policy. These costly missteps could be driving up rates, costing more in the long run. Here are five common blunders drivers make with their car insurance:
- Thinking they’ll qualify for a discount based on loyalty. If the driver has been loyal to the same insurer for a few years in hopes that they’ll be rewarded with a discount, they’ll probably be disappointed. Unfortunately, sticking with the same provider doesn’t guarantee a lower rate, and since insurers regularly change their rates,a driver might be able to find a better deal with a different company. It’s easy to compare multiple quotes online, so review the options at least once a year – before a policy renews – to ensure against paying more than necessary.
- Driving recklessly. The decisions one makes when they get behind the wheel could potentially affect their insurance rate. If a driver is frequently making claims because of accidents, they’ll be considered a risk to insure, meaning they’ll be expected to pay a higher premium. In addition, any traffic offences on a driver’s record will raise rates for up to three years – making the cost of speeding much higher than the fine on a ticket.
- Not advising the insurer about important life events. Insurance rates are calculated based on factors like car, age and gender, where one lives, how much one drives and driving history – among other things. When something changes in life, there is a chance that it will affect an insurance rate, so it’s important that the driver reaches out to their insurer. Some common things you should report to your insurer include moving addresses, having a new driver in your household, getting in an accident or fender bender, making modifications to your vehicle and using your car for business purposes. Failing to disclose this type of information to your insurer could void your policy.
- Over-insuring an older car. Your insurance policy is meant to provide you financial protection in the event of an accident, but what if you’re paying more for insurance than your vehicle is worth? Some types of coverage are legally necessary, but others are not – and they might not be worth the extra money if you’re driving a beater. For example, if the cost of your collision coverage (the amount you pay in a premium and the amount you’d pay for your deductible if you made a claim) is higher than the value of your car, you could save money by dropping it from your policy.
- Not asking for a discount. Have you ever heard the saying, “if you don’t ask, you don’t get”? It’s true for your car insurance too. It’s not that your insurance provider is hiding discounts from you, it’s that they might not know what you’re eligible for or what you’d be interested in changing about your policy. For example, would you be willing to track and report your driving habits for a lower rate? Or raise your deductible to lower your premium? Do you install winter tires on your car? Did your teen take a driver education course? If you haven’t talked to your provider recently about your coverage, give them a call to discuss what discounts are available to you.
The good news: it’s never too late to fix insurance mistakes. If any drivers have fallen into one of these insurance traps, they can start correcting the problem – and saving money – today.