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Saturday, 30 July 2011

4 Car Insurance Mistakes to Avoid

It can be difficult to navigate the car insurance process, and many people make simple mistakes that can cost hundreds of dollars or result in the denial of a claim. When buying car insurance, there are certain pitfalls that many consumers fall into. Knowing how to avoid them will ensure that you maximize the amount of coverage you get for your money and avoid losing a claim because you didn't understand your policy.

1. Not shopping around enough
The number 1 mistake consumers make when buying car insurance is not shopping around enough. With most insurance companies offering online quotes, it may only take an hour to get a quote on premiums for a dozen providers. Premiums vary considerably from provider to provider, and so it is in your best interest to get as many quotes as possible!

2. Not reading through your policy
Taking the time to understand your policy can be the difference between having a claim paid or a claim denied. It's incumbent upon you as a consumer to know what you're insured for, and what is excluded from your plan. You can make your life easier by asking your insurance broker to give you a full rundown of your policy. That being said, you should still personally read your policy and know it well.

3. Failing to pay your insurance premiums on time
One of the most common mistakes customers make is not paying their insurance premiums on time. Failing to do so on many occasions may be cause for your policy to be cancelled. Not only will that mean you can't drive your vehicle in the meantime, but you may also have trouble being insured by other companies. Paying your insurance on time is vitally important.

4. Not notifying your insurance company of important changes
The insurance industry works on the principle of "Utmost Good Faith." You are obliged under contract to inform your provider of any major changes that could affect your premiums. That means that if you move homes and your car is stored somewhere new, you should call up your insurance company. A new location could mean that your car is at greater risk of theft. Other changes, like the addition of a second driver or the upgrading of certain parts, should also be reported to your broker.

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