To avoid the frustration of spending time and money on unexpected rate increases, check out the hidden pitfalls behind them.
Pitfall One: Coverage Lapses and Cancellations
It might be surprising, but not having car insurance coverage can make it more expensive to get coverage. Make sure your policy doesn’t have coverage lapses, as future providers consider this a risk. Auto insurance companies view uninsured drivers as risky investments, even if their driving history is spotless.
Canceling your car insurance policy before securing another one works the same way. If you’re switching providers, make sure your new policy has you covered before your current one ends.
Pitfall Two: Not Checking for Discounts
The world of auto insurance has plenty of discounts. This said, too few drivers pursue them—assuming they either lack qualifications or can’t afford potentially hidden costs. Most car insurance discounts do save drivers money, however. They also help them avoid unexpected policy increases.
A good example is a bundled auto insurance plan. By bundling different insurable interests through one provider, you might discover lower annual costs when they’re combined. Still be wary when pursuing discounts, however, as overall car insurance costs are still vital cost indicators.
Pitfall Three: Speeding Tickets
Even if you’ve never caused an accident, your driving record could cost you. Insurance companies consider your driving history as an indicator of future risk. Speeding tickets are notorious for causing unexpected policy cost increases.
The main reason for this is due to the overlooked dangers of speeding. The Insurance Institute for Highway Safety states that speeding accounts for about 30 percent of fatal accidents. Try to avoid tickets at all costs—because they could create more costs, down the line.
Pitfall Four: Omitting Driving History Information
While longtime drivers with good histories benefit from affordable coverage, those with spotty records tend to pay more. In some cases, it might make sense to pay out of pocket for a fender bender—avoiding the nuisance of claim filing altogether.
You shouldn’t cut corners, however, because omitting any information about your driving history can come back to bite you. Tell your car insurance provider about any infractions, big or small, that you’ve had—as they often find out, anyway. If you omit parts of your driving history, expect higher rates due to lacking trust.
Pitfall Five: Not Comparing Quotes Online
Before you set up your auto insurance policy, do some research. While auto insurance quotes might seem similar at first glance, they often have a lot of price variation when accounting for year-to-year cost.
Talk to your insurance agent to get more information about a plan you like. Before settling on a plan, compare its discounts, coverage limits, deductibles and premiums with those of other plans. Before long, you’ll find cost-efficient coverage with affordable rates.