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Car Insurance Mistakes That Newbies Make (And How to Avoid Them)

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Insurance (n.)

a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.

By that definition alone, you can already infer the utmost importance of securing a car insurance plan. It is no less than a measure that is intended to protect your investment, in a manner than you are able to get compensation in the unfortunate event that your car is damaged.

In fact, this is even mandated by law in 49 out of the 50 states in America, where all drivers are required to carry an active car insurance policy. But, even as important and as compulsory as it is, the strange thing is that there are a lot of car owners who still get things wrong. Committing these errors could prove to be very costly later on, and it may even put you at risk of not being able to make a claim against your insurance when you most need it. After all, if you’re going to be paying for insurance, you might as well get your money’s worth on protection. So, what are these mistakes that prevent you from getting the most out of your insurance?

Not Taking The Time To Do Research

Much like with all major purchases, you need to take the time to consider your options. Not all car insurance companies are alike. Some car insurance companies are flat out better than others. 

A good way to gauge an insurance company’s reliability is by reading through their customer reviews as well as getting a quote from these companies. Some car insurance companies like Allstate even provide their clients with insurance quotes and a complete list of insurance policies online.

Under- or Overestimating Your Insurance Coverage

The trick to getting the most out of your car insurance policy is to get just the right amount of coverage. Underestimating your coverage could leave you with poor coverage that could cause you to lose money when you need your insurance policy to cover those expenses.

On the other hand, overestimating your insurance coverage may cause you to pay for coverage that you don’t necessarily need. 

A good example of these two errors is when you get a high-value car insurance policy for a car that isn’t worth a lot. Some car insurance companies will even try to get customers to pay for roadside assistance coverage even when most modern cars already come with such coverage.

Failing To Update Your Insurance After A Major Life Event

In the same way that getting married affects the tax rates that you’re required to pay, marriage will also affect your car insurance premiums. The same can also be said for when you move to a new address. This is because of several factors that affect your driving habits. Married people tend to drive more cautiously and are therefore at a lower risk of meeting an accident. When you move to a neighborhood that statistically has lower instances of car accidents, you’re also less likely to figure in a car accident.

You could be spending money unnecessarily by overlooking some of these aspects, so book a quick appointment with your car insurance agent.

Buying A Car You Can Barely Afford

It’s a widely established fact that the more valuable your car is, the higher you’re going to have to pay to have it insured. Now, if you can barely afford a car, it should follow that you might also be barely able to pay to have it insured. Consider the fact that this is also besides the fact that expensive cars are also expensive to maintain. As with most things in life, it’s always best to live within your means.

The thing about insurance is that there isn’t a standard package that you can simply pick out and leave. You don’t simply tell your insurance agent that you want full coverage. It’s important to take your car insurance seriously and to treat it as no less than a means to protect your investment.

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