Car insurance is essential when driving on the road, as it protects you from the full costs of accidents. Without insurance, you might have to pay hefty sums for life-threatening accidents or badly-damaged cars.
Whilst many people know to get a quote or check reviews before you decide on a car insurer like https://www.youi.com.au/car-insurance, most assume that insurance is generally safe and don’t think twice before purchasing one. As such, the majority of people aren’t aware of the potential black spots and pitfalls of insurance.
Everyone needs to be properly insured, and with this guide, you’ll know how to buy insurance the right way. Here are some things that you should not do when purchasing insurance.
Lower The Premium, The Better?
It is understandable to have budget constraints as not everybody is at the same level of financial capability. Though these financial constraints will affect the amount of insurance coverage you take out, especially if you’re a first-timer, cutting too many costs might not be the best decision to make. You’ll probably end up sacrificing more coverage in exchange for paying less.
The first thing motorists should do is to assess the age and value of the car to gauge how much coverage is needed. If you have a brand-new car, you shouldn’t underinsure it as you don’t know what kind of risks you’ll be exposed to. For example, if you’re parking in a public space overnight, you’ll need a minimum of third-party, theft, and fire coverage, as required by the law.
We recommend always reading the fine print to ensure that you have sufficient coverage in place, even if it means paying a little bit extra. Insurance companies that charge you an extremely low premium can be fishy!
Lack Of Research
People often conduct insufficient research on the insurance policies they are taking up. Choosing the ideal insurance coverage should always be done with enough research and third-party considerations.
Firstly, we suggest taking a quote from as many insurers as possible, as well as consulting specialists or lesser-known providers. Next, ensure that the quote covers the items you need, such as lost car keys or window screen protection, for example. Not all policies have the same coverage, so beware!
Lastly, don’t forget to consider factors like the reputation of the insurance companies, their online experience, customer service records, claims-settlement ratio, and more.
Don’t Over Purchase Add-Ons And Extras
As much as we want to be budget-conscious, it’s not recommended to cut down on your coverage. To be underinsured is no different from not being insured at all.
There are a plethora of add-ons such as breakdown assistance, coverage for broken glass, and even no-claim discounts within each insurance company. Whilst it is better to be safe than sorry, you shouldn’t over-purchase add-ons. Consider carefully what is needed and what is excessive.
Insurance companies require you to build up a comprehensive driver profile that has all the essential information and risk calculation inside. Because of this, you need to be 100% honest with your insurance company. Should any lie or exaggeration be brought to light, you can stand to lose your insurance, be blacklisted, and even asked to pay fines. All of which would even jeopardize your chances of getting insured by other companies. In the end, the consequences are not worth the extra costs you are trying to save by lying in the first place.
Furthermore, the insurance fraud ‘fronting’ has also a very high price to pay. Fronting refers to someone taking over someone else’s insurance policy for themselves and their car. Many assume that this is harmless, but ‘fronting’ can lead to the individual being persecuted in court and losing their insurance coverage.
Not Alerting Your Insurance Company
While providing false information is bad, withholding information is nowhere better. If you are convicted of a driving offense or if you collected some demerit points, it is important to alert your insurance company. Some drivers hide their demerit points until their policy is up for renewal, which results in them having to incur a loading penalty at the cost of their premium. The amount that they have to pay differs –– some charge them after only two penalty points, whilst others only charge for certain offenses.
Likewise, if you happen to get into an accident, you must let your insurance company know immediately. They are responsible for insuring you, and accidents may change the shape of your driving profile. You must also notify if anyone else was involved in the accident and if any injuries were sustained, in case another claim is made in the future.
Not Knowing Your Insurance Policy Well
Another mistake you should avoid is not being well-versed with your insurance policy. It is important to know every bit of your policy, especially what it covers and what it doesn’t cover. This way, you can drive with ease or caution depending on the level of coverage you have consciously opted for.
In the end, you should know where every cent of your money is going when it comes to your insurance. If you are not well-versed with your insurance policy, you can contact your insurance agent and have him go through your insurance details with you. Do make sure you get a reliable insurance agent, who is actively seeking to help you get a policy that has the best value for money instead of one that is trying to earn as much money off you as possible.
Sticking With The Same Insurance
Another mistake one could make is to stay with the same insurer. While bulk insurance policy discounts exist, the demand for auto insurance is so high and constant, the discount would not be as significant. Always be looking out for better value insurance packages as most of these promotional insurance policies are available for a limited time only.
Do remember when looking out, do not focus on policies with lower premiums. Instead, focus on which policies have better value for money, or more coverage for a lesser premium.
Missing Out On Discounts
Be sure to be on the lookout for discounts that insurance companies often offer. This includes no claim discounts, which are available for drivers who do not claim insurance for a long period.
Another type of discount you should be aware of is anti-theft system discounts. Be sure to check in with your agent often for discounts you qualify for!
All in all, there are many things you should avoid when buying insurance. Often, people who try to save too much money end up with less-than-ideal insurance plans with unreliable companies. It’s also important that you be upfront about any mistakes or accidents made as these can cost you penalties in the end. In the end, these people end up paying more than they initially agreed to.