The need for auto insurance is apparent to most people, but can you make mistakes when buying a car insurance policy?. Here are some things you want to avoid in order to keep you financially protected and even save you some money.

 

Not having auto insurance. All 50 states require that owners of registered vehicles either have auto insurance or can prove that they have the financial means to pay for damage and injury in the event of an at-fault accident. Having auto insurance is the most common way to show financial responsibility. Each state also has different penalties for driving uninsured, and this can be high. Additionally, you could be sued by the other people involved.

 

Not carrying enough coverage. Each state sets out laws for minimum auto insurance coverage, typically for bodily injury and property damage liability. The minimum limits are often not considered enough, however, by insurance experts who recommend better financial protection.

 

For example, you may only be required to carry limits of $10,000 for property damage liability, but a single collision could costs thousands of dollars more than that limit. Anything above the limits comes out of your assets.

 

Carrying too much coverage. You may want to consider dropping collision and comprehensive coverage on vehicles older than 10 years. The amount you receive for the claim on an older vehicle could be less the amount of your deductible and the added premium.

 

Not taking advantage of discounts. Car insurance discounts are there to help lower your premium and save money. Take a look at your current policy and see what kind of discounts you are getting. Then contact your agent to verify that there aren’t additional discounts you can qualify for. Like rates, discounts can also vary from insurer to insurer so be sure to check out the discounts offered from each company you contact for a quote. Common discounts include insuring both your auto and home with the same company, having low annual mileage, having air bags and more.

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Not comparison shopping. It doesn’t take much time to compare auto insurance and find the lowest cost. Periodically shopping for quotes can save you hundreds annually because rates can vary from one company to the next.

 

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