Purchasing auto insurance can be daunting, especially if you are doing it for the first time. With so many insurance companies offering you different deals and benefits, it can sometimes seem impossible to make a choice. How can you save the most money? What sort of policy is right for you? What factors determine your premiums? These are all questions that are commonly asked when newcomers are in the market for insurance. It can be difficult, but luckily we are here to help. Here is our list of the five most common auto insurance mistakes people make when purchasing a policy for the first time.
1. Not shopping around for the best rate
This is possibly one of the most common auto insurance mistakes, so it deserves to be first on the list. When purchasing auto insurance, people tend to pick the first insurance quote they receive or insurer that sticks out to them. Sometimes, this can be due to a recommendation from a family member or friend. However, this is not a best practice. By viewing one policy and going forward with it, you miss out on other potential rates that can be much better for you and your needs.
Shopping around and comparing is crucial when it comes to finding a policy that is perfect for you. You wouldn’t go to the first dealership you see and pick out the first car you come across, would you? You should have the same mindset when it comes to shopping around for insurance! That’s why we suggest working with an isure broker, who will shop the market for you for the best rate. Additionally, it is also important to make sure you are speaking with an FSCO-licensed general insurance broker.
2. Not asking questions regarding your auto insurance
In many situations, when people decide on a policy, they leave it at that. This is also not the best approach. Since people are generally purchasing insurance because they legally have to, it is common for people to set up a policy and forget about it until it’s necessary. This can lead to some issues down the line. Once you have chosen an insurance provider or broker, prepare to ask a plethora of questions about your policy. From increasing your coverage and how to contact them after-hours, to benefits that can arise from sticking with them. The more information you know, the better. This will give you peace of mind and help you in the event that you need to file a claim down the road. This is one of the many auto insurance mistakes you’ll want to try to avoid.
3. Reducing your premium by increasing your deductible
We understand that it can be tempting to pay less out-of-pocket every month. In order to do this, many people may turn to increasing their deductible. This is a tactic that works for some people, such as those who don’t drive often or live in low-traffic areas. However, it is generally a recommendation to proceed with caution when doing this. By increasing your deductible, you put yourself more at-risk if damages do occur. This can mean paying a lot more out-of-pocket in the event of an accident. As a result, you will have to make sure you’ll be financially capable fo paying that deductible amount in the event of a claim. In order to avoid this, it is important to find a middle ground of what you are comfortable paying monthly. This is a very common auto insurance mistake that may have you paying more than you can afford.
4. Only purchasing the minimum coverage for your auto insurance
In the province of Ontario, drivers need to have at least $200,000 in third-party liability coverage. This provides protection in the event you are sued or cause damage to someone else or their vehicle. Over time, drivers can choose to substantially increase this coverage. This will ensure all of your bases are covered. Generally, people will only purchase coverage that directly relates to car accidents. Though these are more common, it is important to increase your coverage to include more perils or “all perils.” This confirms that you have coverage in specific events, such as fires, theft or some natural disasters.
5. Not being honest with your insurance broker or insurer!
Unfortunately, many people think that lying on their insurance application can score them some cheaper premiums. This however, is not the case, and is a common auto insurance mistake newbies make. Lying on your insurance application is a big deal. If caught, not only will the insurance company deny your claims, but it can make getting a policy from another company even more difficult. In some cases, people will unknowingly lie on their application. This is why it is important to make sure you have all of the correct information regarding previous policies, and what you are looking for in your current one.
What are people dishonest about?
Generally, the most common area people will be dishonest about is what the vehicle will be used for. For example, if your vehicle is for strictly business purposes, you must inform your insurance company and likely take out a commercial auto policy. The second area people are dishonest about is who will be driving the vehicle. Everyone knows that by adding a young driver to your policy, the price of your premiums will go up. This can make it tempting to not add the young driver to your policy as a primary or secondary driver. In the event the younger driver gets into an accident, your claim will likely be denied and your policy terminated for being dishonest.
At isure, we know just how difficult the world of insurance can be to navigate for the first time. This is why we believe you should always make it a priority to get in touch with an isure broker if you are in the market for car insurance. To avoid any of these common auto insurance mistakes, be sure to be as thorough as possible with your isure broker, and ask any necessary questions you may have. Contact us or request a quote today, and make your insurance shopping that much easier!
