October 10, 2009

Mistakes To Avoid When Buying Auto Insurance

When it comes to buying auto insurance, many consumers make several common mistakes that can end up costing a bundle. Knowing what these mistakes are and avoiding them when purchasing an auto insurance policy can save drivers thousands of dollars down the road.

First, beware of choosing an insurance company based on price alone. Getting the lowest price might seem like a great deal at first, but, after filing a claim, many policyholders discover they've been taken for a ride when the agency fails to deliver what they promised. A good way to avoid being this is to research a company's reputation before giving them your money. Visit your state's Department of Insurance website. This site will offer you consumer complaint ratios for the insurance companies that sell policies in your state. You can also verify an insurance agent licensing credentials on the site. All of this will help you determine your potential insurer's dependability.

Also, before giving the first representative you question the green light on a policy; see the rates other insurance providers can offer you for the same amount of auto insurance coverage. While some sales agents may try to convince you they offer the best coverage at the most affordable price, doing some comparison shopping of your own will help you get the most for your money. An easy way to compare companies is to use the Internet. Several sites will allow you to enter the type of coverage you want and will then provide you with quotes of what various companies will offer you for the same amount of coverage. Most times this is even free.

Don't make the auto insurance mistake of buying the legal liability limit of coverage. If you are found to be at fault in an accident, you will have to pay the difference. When purchasing liability, remember to factor in the possibility of medical costs, property damage and pain and suffering for multiple passengers. Another major auto insurance mistake shoppers make is providing incorrect information to their insurance agent, which can leave them with too little coverage. When your agent asks if there will be any other drivers operating your car, say yes if you plan ever let a friend or family member borrow your vehicle, even if for a few minutes. This way, if he or she is involved in an accident, your insurance company will properly cover you.

As you shop for an auto insurance policy, avoid these common mistakes that many insurance shoppers make. Avoiding them now could save you hundreds, or even thousands of dollars later, and will ensure you are properly covered in case of an accident.