Car insurance is basically purchased to get a safety net against an unpleasant situation. However, after purchasing car insurance policy, many people realize that they do not get the required coverage. Therefore, one should always take into account various factors when purchasing car insurance policy. Keeping in mind the dos and donts of car insurance purchase will certainly help the first time buyer to make a wise decision. There are certain common pitfalls that car insurance buyers must avoid.
- One common mistake that many car insurance buyers often commit is to slash the coverage in order to lower the premium rates. By dropping the coverage to save money, people forget that their insurance policy will not provide expenses for clauses not covered by the policy. A cheap insurance policy will offer lesser coverage. Such a policy may prove to be more expensive than cheap as you may have to shell out money from your pocket for costs that are not covered by cheap insurance policy. Therefore, do not always look for the cheapest policy. Although price is an important determinant in making a purchase of a car insurance policy, it is not the sole determinant. Go beyond the price and check out the amount of coverage provided by the car insurance policy.
- Do not insure your vehicle only for the sake of complying with the basic minimum liability requirements as required by the state you live in. Most car insurance buyers get only coverage to meet the minimum set standards as mandated by the state. In case when the person driving the car is found responsible for an accident and the costs from the aggrieved party exceeds the costs as covered by the insurance policy, the one found at fault for the accident has to pay for all the costs from his own pocket. Therefore, one should not always look to insure their vehicle only to meet minimum liability requirements. It is a good idea to go for a higher coverage than just the minimum liability insurance cover as such a policy would adequately provide coverage for the damages and bodily harm as caused to the other party in the event of an accident.
- While it is never a good thing to underinsure your vehicle, one should not over insure their vehicle. It is not a very good idea to take collision and comprehensive coverage on an old car that has very little resale value. Getting collision and comprehensive coverage on your old vehicle will only add to your cost. It is a wise thing to drop such coverages if your car is 7-10 years old.
- If you want to make modifications in your car, do remember to check whether the costs to make modifications will be covered by the insurance policy provided by your agent. Often it is found that insurance companies do not pay for the costs undertaken to make modifications in the engine.
- Do not forget to assess the blue book value of your car when filing for the claim of your totaled vehicle. It will be better if you look at an average for the purchase value of minimum five such cars in your area and then take out the average cost to ensure that your insurance provider pay you for your totaled vehicle.
- One common mistake that many car insurance buyers often commit is to slash the coverage in order to lower the premium rates. By dropping the coverage to save money, people forget that their insurance policy will not provide expenses for clauses not covered by the policy. A cheap insurance policy will offer lesser coverage. Such a policy may prove to be more expensive than cheap as you may have to shell out money from your pocket for costs that are not covered by cheap insurance policy. Therefore, do not always look for the cheapest policy. Although price is an important determinant in making a purchase of a car insurance policy, it is not the sole determinant. Go beyond the price and check out the amount of coverage provided by the car insurance policy.
- Do not insure your vehicle only for the sake of complying with the basic minimum liability requirements as required by the state you live in. Most car insurance buyers get only coverage to meet the minimum set standards as mandated by the state. In case when the person driving the car is found responsible for an accident and the costs from the aggrieved party exceeds the costs as covered by the insurance policy, the one found at fault for the accident has to pay for all the costs from his own pocket. Therefore, one should not always look to insure their vehicle only to meet minimum liability requirements. It is a good idea to go for a higher coverage than just the minimum liability insurance cover as such a policy would adequately provide coverage for the damages and bodily harm as caused to the other party in the event of an accident.
- While it is never a good thing to underinsure your vehicle, one should not over insure their vehicle. It is not a very good idea to take collision and comprehensive coverage on an old car that has very little resale value. Getting collision and comprehensive coverage on your old vehicle will only add to your cost. It is a wise thing to drop such coverages if your car is 7-10 years old.
- If you want to make modifications in your car, do remember to check whether the costs to make modifications will be covered by the insurance policy provided by your agent. Often it is found that insurance companies do not pay for the costs undertaken to make modifications in the engine.
- Do not forget to assess the blue book value of your car when filing for the claim of your totaled vehicle. It will be better if you look at an average for the purchase value of minimum five such cars in your area and then take out the average cost to ensure that your insurance provider pay you for your totaled vehicle.
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