Costly car insurance mistakes

Keeping track of your auto insurance plan is probably not on the top of your list of daily tasks to accomplish. While your priorities may be figuring out what your lunch is going to be or knowing the earned run average of your favorite baseball team, you should make an effort to pay attention to your coverage. These payments can be very expensive, and if you are not keeping an eye on it, you could be spending more than you need to. Here are some common auto insurance mistakes that could be costly:

Deductible is too low
When you get into an accident, you will need to file a claim on it. In this situation, you'll have to pay a set amount out of pocket - your deductible - before the insurance begins to pay. For instance, if the repairs on your car total $3,000 and your deductible is $500, the insurance will cover $2,500. For some insurance plans, if you pay more for your deductible, your monthly or yearly rates will go down. If you pay more for your deductible, you will be paying more out of pocket in the event of an accident, but the savings you make on cutting down your monthly rates could justify it.

Forgetting about discounts
You may be antsy to hit the road in your new automobile and forget to look at the other discounts your insurance company can provide. When you have large expenses like insurance payments, it would be beneficial to seek out any discounts you can qualify for. Some common discounts include:

  • Good driving record
  • Combining car insurance with home or renters insurance
  • Having a vehicle with specific safety features
  • Low amount of miles driven in a year

    Sticking with one plan
    When you sign up for a plan, you do not have to stick to it. You may improve as a driver over the years, for example, which can work to your benefit when you are looking for a new policy. There are many places where you can shop around for a new plan that can help you save money in the long term.

    Payment plan fees
    When you find coverage that suits all of your needs, be sure to read the fine print about payment options. In some instances, you will have to pay extra convenience fees if you pay in installments, which can begin to add up over time.

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