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Top 6 Mistakes People Make When Buying Auto Insurance


Achieving savings on auto insurance is a universal objective, given that insurance is a purchase one hopes to never utilize. However, attempts to reduce costs can sometimes lead to decisions that may prove more costly in the long run. Drawing […]

Achieving savings on auto insurance is a universal objective, given that insurance is a purchase one hopes to never utilize. However, attempts to reduce costs can sometimes lead to decisions that may prove more costly in the long run. Drawing upon over two decades of experience as an insurance agent, I’ve observed clients making choices to cut expenses, only to face adverse consequences later.

While I can offer guidance to clients, the ultimate decision rests with them. Unfortunately, there have been instances where decisions made to save a few dollars on car insurance resulted in negative repercussions. To help you avoid common mistakes, I’ve compiled the top six errors people make when purchasing auto insurance, along with explanations of how they may lead to higher costs down the road.

1. Setting Your Deductible Too High:

Opting for a higher deductible can lower premium rates, which entices many vehicle owners. However, this decision can backfire when an accident occurs, and you must pay the deductible upfront before repairs commence. If repair costs exceed what you have available, you might find yourself unable to get your vehicle fixed promptly. Ensure you have sufficient funds to cover a high deductible, or risk being without your vehicle until you can settle the amount.

2. Setting Your Coverage Limits Too Low:

Some states, like Pennsylvania, mandate low auto insurance limits. While this reduces premiums, it becomes problematic after causing an accident. With the average vehicle costing over $42,000, minimum coverage may prove inadequate, leaving you personally liable for damages exceeding your insurance limit. In such cases, a lawsuit may ensue, putting your assets at risk. Opting for higher liability limits safeguards against potential lawsuits, offering more comprehensive protection.

3. Lying On Your Car Insurance Application:

Dishonesty on insurance applications, whether intentional or not, can lead to claim denials. Common areas of untruthfulness include not disclosing young drivers and misrepresenting vehicle usage. Failure to add a teenage driver or accurately portray business use can result in claim denial or policy termination. While lying may secure lower rates initially, one accident could incur significant financial repercussions.

4. Not Looking for Discounts:

Many insurance companies provide discounts, and policyholders may qualify based on various criteria. These include bundling policies, seasonal vehicle use, safety features, automatic premium withdrawal, full annual premium payment, or willingness to use a telematic device. A proactive insurance agent should actively seek out discounts, helping clients maximize savings. Inquiring about eligibility for additional discounts can further enhance cost-effectiveness.

5. Buying Insurance with a Large Online Company:

While national online insurers may offer competitive prices, the drawbacks become apparent when filing claims or facing insurance issues. Purchasing insurance from a local independent agency often ensures a more personalized experience. With a designated agent, clients receive consistent support, establishing a long-term relationship. Choosing a local agent fosters client advocacy, offering a personal touch absent in larger online entities.

6. Switching Insurance Companies Every Year:

Frequent shifts between insurers may seem like a savvy cost-saving strategy. However, insurance companies value customer loyalty and reward it with more favorable rates. When applying to a new company, they consider your insurance history, recognizing loyalty to the previous insurer. While switching might yield short-term savings, long-term rates are typically more favorable for steadfast customers.

Considering Baily Insurance:

If you’re seeking a local independent agent in Southwestern Pennsylvania, Baily Insurance might align with your needs. Our team prioritizes helping clients secure optimal coverage from highly-rated insurers. We believe in providing comprehensive protection rather than settling for the cheapest option, safeguarding what matters most since 1880. If you desire an advocate to protect your family, home, assets, and business, consider Baily Insurance for a personalized and committed approach.

Contact us today to explore how we can best serve you and your insurance needs. We eagerly anticipate the opportunity to assist you!

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