Shopping for car insurance can sometimes feel overwhelming. And with so many options to choose from, it’s possible to make some mistakes that end up costing you in the long run. So, regardless of your insurance needs, follow this guide to learn more about common car insurance mistakes and how to avoid them.
1. Thinking You Have “Full Coverage”
If you’ve ever purchased car insurance, you’ve likely come across the term full coverage. Typically, full coverage describes a combination of different coverage types that protect your vehicle. However, it’s important to know that there is no universal definition of full coverage—that’s because everyone’s insurance needs and scenarios differ.
Nearly every state in the country requires drivers to carry liability insurance. However, many additional coverage types, such as rental car reimbursement, are entirely optional.
When insurers use the term full coverage, it often represents a policy that includes state-required insurance, collision, and comprehensive coverage. But what truly constitutes as being fully covered will depend on your specific insurance needs, which can vary immensely from driver to driver. So, to avoid making a critical mistake, carefully review every policy before signing to understand what is and isn’t covered.
Nearly every state in the country requires drivers to carry liability insurance. However, many additional coverage types, such as rental car reimbursement, are entirely optional.
When insurers use the term full coverage, it often represents a policy that includes state-required insurance, collision, and comprehensive coverage. But what truly constitutes as being fully covered will depend on your specific insurance needs, which can vary immensely from driver to driver. So, to avoid making a critical mistake, carefully review every policy before signing to understand what is and isn’t covered.
2. Forgetting to Ask About Discounts
Another common car insurance mistake consumers need to remember is to ask about insurance discounts. In fact, most major insurance providers offer various discounts you may already be eligible for by simply being you.
When shopping for a new car insurance policy, always double-check with your provider to see if you qualify for any discounts. At Orion Indemnity, some of the car insurance discounts we offer are the following:
When shopping for a new car insurance policy, always double-check with your provider to see if you qualify for any discounts. At Orion Indemnity, some of the car insurance discounts we offer are the following:
- Muti-car discount – available for policyholders with multiple insured vehicles.
- Good student discount – available for young, full-time student drivers that maintain a B average.
- California good driver – do you meet California’s good driver criteria? If so, there’s a discount for that.
- Multi-policy – Orion Indemnity offers multi-policy discounts for qualified Mercury homeowner policyholders.
- Association discounts – providers may also offer discounts to drivers that are members of associations such as Costco, Sam’s Club, and AAA.
3. Purchasing Too Much Car Insurance Coverage
Did you know purchasing too much coverage and being overinsured is possible? Not only is this possible, but it’s also one of the most expensive car insurance mistakes to make.
For example, if you own an older vehicle with a low market value, purchasing optional coverages like collision and comprehensive insurance may cost you more than any potential payout you’ll receive after an accident. Therefore, to avoid overpaying for insurance, we recommend comparing the value of your vehicle to the cost of any add-on coverages.
In addition, be sure to review any auto benefits you may already have by being a member of various associations, such as AAA. Doing so can help you avoid paying double for similar services.
4. Purchasing Too Little Coverage
On the other hand, it’s just as possible to purchase too little coverage and be underinsured. So although it may be tempting to base your search on the lowest premium available, doing so could leave you with major out-of-pocket expenses should you be involved in a collision.
A common car insurance mistake many consumers make is assuming their state minimum requirements will fully cover all expenses after a collision. Unfortunately, that is not always the case. For example, California only requires drivers to carry liability insurance, which doesn’t cover any damage to your vehicle. Additionally, California’s liability limits are quite low at 15/30/5, which can leave you financially responsible for any remaining costs after an accident.
5. Setting a Deductible Too High
The best way to avoid making common auto insurance mistakes is to understand the policy that you are purchasing. In insurance, a deductible represents the amount you are responsible for paying towards an insured loss before your provider handles the rest (up to your policy’s limits).
For most policies, a higher deductible means a lower insurance rate. However, it also means you’ll face a higher out-of-pocket expense if you get into an accident. On the other hand, having a lower deductible means having a higher insurance rate but a lower out-of-pocket expense.
When setting your deductible, we recommend choosing an amount you’ll be comfortable paying if your car needs any repairs. Remember, auto insurance deductibles are typically on a per-claim basis.
Car Insurance for California Drivers
One of the easiest ways to make these common insurance mistakes is by not speaking to an insurance professional that can assist with your search. At Orion Indemnity, we focus on providing California drivers with the coverage options that work for them. Our team of insurance agents can guide you along the insurance landscape and can answer any questions you may have.
To learn more about how Orion Indemnity can provide you with a policy that suits your needs, call us today at (833) 336-7466.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.
