5 Mistakes to Avoid When Buying Car Insurance

Car insurance can be one of the biggest costs of car ownership. Whether you’re renewing your policy or shopping around for coverage, be sure to avoid these five car insurance mistakes.

If you would like to work with an insurance agent who can help you understand the specifics of your auto insurance policy and help you save money on car insurance, talk to Farm Bureau.

Mistake #1: Not Comparing Rates

It’s a good idea to get quotes for how much your insurance would cost from a few different companies. If you’re happy with your current car insurance company, you can ask them if they can match the lowest rate or see if they can explain why they’re worth a higher price.

Be sure to factor in any other discounts when you’re comparing rates. For example, some companies offer discounts for bundling home and auto insurance, for having a good student on your policy or for safe driving habits. 

Mistake #2: Buying the Cheapest Policy Without Researching

The cheapest company might not be the best choice. It could have a reputation for poor customer service. Check reviews or the National Association of Insurance Commissioners website to make sure you’re not setting yourself up for headaches down the road if you need to file a claim.

Mistake #3: Skimping on Auto Insurance Coverage

One of the best car insurance tips is to make sure you have the coverage you need, not the bare-bones option. Not having enough auto insurance coverage can mean your monthly or yearly policy costs are lower, but you could end up paying much more if you’re involved in an accident.

It’s especially important to make sure you have the right amount of coverage if your car is paid for. If you have an auto loan, your bank will probably require that you have a certain amount of coverage. 

Mistake #4: Not Considering Gap Insurance

Gap insurance covers the difference between what your car is worth and how much you owe on your auto loan. It’s important for new cars, since they can depreciate quickly. 

For example, say you buy a car for $50,000. A year later, you owe $45,000, but the car is worth $40,000. If your car is stolen, your insurance will only pay the $40,000 that it’s worth (minus the deductible). Gap insurance gives you coverage for that $5,000 difference. Without it, you’re out $5,000.

Mistake #5: Having the Wrong Information on Your Applications

You’ll need to fill out a lot of details when you’re shopping for car insurance, like:

• Information about all the drivers on the policy, such as name, address, date of birth, driver's license number and driving history.
• Information about your car, like make, model, vehicle identification number (VIN), odometer reading, miles driven per year and safety features.
• Types of coverage you want and the amount of coverage you need. It’s especially important that you enter the same information if you’re comparing costs from different companies.

It can be easy to make a mistake when you’re entering this information, and that can mean your estimates and comparisons are inaccurate.

Get the Auto Insurance Coverage You Need

Reach out to Farm Bureau to review your auto insurance policy and make sure you have the coverage that protects you and your family at a price you can afford.