Insurance Basics: Everything You Need to Know

Costly Mistakes You Can Make When Investing In Auto Insurance

Buying an insurance premium for your vehicle may not be as easy as many would like to believe. There are many products in the market, so sometimes, it takes time to figure out the products that will give you the best value for your money. This is an important decision because it guides the insurance company's payouts to cover injuries, damages, and other expenses if you are involved in an accident. Therefore, you should consult wisely and avoid making mistakes that might shortchange you. Here are some costly errors you can make when investing in auto insurance coverage.

Not Listing the Names of All Drivers

The insurer needs to know the names of everyone who might drive the vehicle. If it is a personal car and you are sure that you will not be giving it out, you can include only your name. However, in a family setup where a spouse and older children might need to use the car, it is best to list them. The insurer is responsible if anyone causes a crash behind the wheel. Still, if they discover that someone else uses the vehicle other than the listed drivers, they may either raise your premium or cancel the policy.

Giving Inaccurate Mileage Data

Another common mistake people make is giving information on mileage without proper investigation. Inaccurate mileage details might make the insurer unable to accurately gauge the possibility of your getting into an accident. Generally, people who drive long distances daily are more likely to get into a collision. When you do not give accurate information, you shortchange yourself because the insurer cannot offer the product best suited to your needs. Consequently, you might have to cover liabilities from your pocket.

Being Untruthful About Your Driving Record

It is also common for people to lie about their past misdeeds as drivers. DUIs, traffic tickets, and other errors are crucial information for an insurer. As such, lying about them gets you into trouble because once the insurer discovers the truth, they will likely give you higher premiums or cancel your auto insurance policy. Tell the truth and have the insurer recommend reasonably-priced packages.

Failing to List the Vehicle as Commercial

It is also best to list your car as a commercial vehicle if you plan to use it for business purposes. Accidents while making deliveries or providing ride-share services are possible, and failing to register as a business vehicle denies the insurer a chance to assess additional risks and let you know what protection to add on.

These are mistakes that everyone should avoid when investing in insurance premiums.

Contact an agent to learn more about auto insurance coverage