Mistakes You Need To Avoid When Buying Auto Insurance

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Auto insurance is expensive and it is getting more expensive. Right now, we’re seeing with inflation being so much more and so many more natural disasters happening, we’re also seeing auto insurance rates just go higher and higher. I’m going to try to help you make informed decisions about your auto insurance so you don’t pay too much for the coverage that you need and also keep you from just making some of those different mistakes, and just not knowing what in the world you’re buying.

You’re going to spend a lot of money on your auto insurance, shouldn’t you understand what you’re buying? Don’t you deserve to know what it is you’re buying? I’m gonna give you 10 tips to help you understand the best decisions that you can make about buying your auto insurance.

Knowing the insurance coverage you need.

Tons of consumers will go in and they got no idea what they’re looking for, they’ll go in and ask for full coverage and they don’t even know what that word really means. There’s no real term that I can just say, there’s not really anything called “full coverage”, honestly. Now, we have like some sort of an estimate or an assumption we can make, that will say, “Yeah, this is what that means”. Whenever you assume things, it doesn’t work out the best for you, it’s not the best thing you can do for yourself. Don’t assume and don’t just go in not knowing what it is that you actually need.

Not comparing insurance companies.

A lot of insurance companies, unfortunately, have bad reviews, because the thing is, people don’t just get excited about reviewing insurance companies, they get excited and motivated whenever something goes wrong. It’s going to be a lot of negative reviews, unfortunately, because of that, they’re not warranted and most insurance companies are very good. Now, what is important is to know your insurance agent, as an independent insurance agent, we represent a lot of different insurance companies and if it’s a good agent, they’re going to be picky about who they work with, you can take a look at us. Do a Google search on us and see that we’ve got a lot of Google reviews that are all five-star reviews because we care about our clients and also we’re very picky about the insurance companies that we work with. We value the relationship that we have with you as a consumer, we’re going to advocate for you, we don’t want to put you with a company that we know is not going to take good care of you. We fired insurance companies in the past, we will probably again in the future too because they didn’t take good care of our clients. So look up reviews about who every agent is, and look for an independent insurance agent because they represent a lot of companies.

Lying on your application

If you think you’re good at hiding violations, accidents, or claims, it’s going to show up, all those different things are going to show up because we run all kinds of different reports that show these different things that you’ve got on your history. Another thing that potentially may not show up is undisclosed drivers. If you’ve got some sort of drivers in your house, such as teenage drivers, or just maybe family members that live with you, you may need to list them. The reason is, there are some insurance companies out there that will exclude coverage for that person if they live inside of your house. If they’re driving your car, with your permission, and they’re not listed, they may be excluded. If they have an accident, there’ll be maybe no coverage, it doesn’t matter if it’s their fault or not. There may be absolutely no insurance coverage at all. We don’t represent any insurance companies like that, but you need to be aware that there are a lot of insurance companies out there that are both direct and also in the independent channel that do so don’t lie on your application. Another thing is that if you do lie on the application and you’re found out at claim time, that’s called fraud and they can deny your claim no matter what.

Forgetting to update your insurance policy

Life changes, right? all kinds of things change like, you pay off your car, you have a teenage driver that comes on, you have a teenage driver that moves out of the house, or you have you move to another location maybe inside of the same city but still, all those things impact your rates on your policy. Maybe you don’t need certain coverages anymore or maybe you do need some other coverage now. So make sure that you talk with your agent annually and let him know some things that are changed and ask if they affect your insurance.

Wrong deductible amount

The higher the deductible, the lower your premium, the lower your deductible, the higher your premium. Ask yourself, “does it make sense for me to have a $500 deductible?” whenever you can afford to have a higher deductible since you’re probably not going to turn in those smaller claims because they’re just going to adversely affect your insurance. Ask your agent about increasing those deductibles for you to save some money.

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Not researching car insurance online

This goes back to number one to some degree, right? It’s you going in and making sure you understand the coverages you need. Look, if you work with us, we’re going to explain to you about those insurance coverages but every agency is not going to do that. I’ve talked before about our four promises, one of those promises is that we want to make sure that you understand what you’re buying because it cost a lot of money, you should understand, do research on your own, and then talk to your agent. If your agent is not explaining these coverages, you need to find another agent, because they are not the best agent for you.

Buying minimum insurance coverage

A lot of states have a minimum liability limit coverage that you can buy and you can buy this legally, but it is not the best thing for you. Here’s why, whenever you buy those really low limits, they’re not going to adequately protect your assets. Many times these asset amounts are not even enough to borrow to pay for a car. If you get into an accident, you know that you would get it fixed. What happens is, if you have an accident, and you run out of those liability limits, the insurance company is out of the game and it’s up to you. You got to get out your checkbook or your credit card and start passing out your dollar bill because you’re still responsible, even though you run out of insurance.

Do not buy the minimum limits, if you’ve got an agent that is okay with you buying that and you got a $300,000 house, you got a couple of cards, you got children that are in college, you need to fire that agent and find you another agent. Look, we tried to make sure that all of our clients have higher limits than that to make sure that they have adequate limits for what their needs are. If your agent is not willing to talk to you about it, or just says no, that’s all you need.

Buying excessive coverage

I know it sounds funny for an insurance agent to say that you could buy too much insurance, well, you can. There are different coverages that you just flat-out don’t need. Remember, I talked about the lower deductibles, you don’t need lower deductibles if you can afford to pay $1000 or $20,000 out of pocket, you need to do that because you don’t need to file the small claims in it because you’re just going to pay for it over time. So it’s just not wise. Well, there are also other coverages that you just may not need to buy, like if you buy a brand new car, the dealership is going to try to sell you coverage called gap. You can buy that from your insurance agent for a lot less money. I mean, maybe like a 10th of what the cost is at the dealership.

Another thing that you can buy that you may not need a lot later on or that you may not need at all is full glass. Comprehensive coverage is gonna cover your windshield but maybe you’ve got a really small deductible. How often do you really replace a windshield? Do you need to pay that extra money for that?. Just keep that money in your pocket and then whenever you need it, then you pay for it because you may not ever pay for it. Look, I’ve had a vehicle and I’ve been driving my own cars for over 30 years. I’ve only replaced the windshield once. You know, does that make sense for me to pay more money when I’ve only replaced the windshield once? and all that time on one of the two cars that we have? it doesn’t make sense.

Not asking questions

You deserve to know you deserve to understand what you’re buying. You are the consumer, you’re paying the money and you deserve to understand what you’re buying. Ask questions. If your agent will not take the time to explain coverages to you, fire them, and get another one because there are plenty of good agents out there.

Not looking for discounts

There are tons of discounts out there, whether you’re a military member, educator, your education level, married, a student, or bundling your insurance. There are all kinds of different discounts out there. Talk to your agent, and tell them a little about yourself. Tell them if you got students, children that are away at school, you’re about to get married, you’re about to buy a house, you’re planning on living somewhere, if you’re active military, all those different things matter.

Even the best agent is going to forget some questions. They’re going to try to do their best to find out least a good agent is going to try to find out, you know, different ways that they can help you save on your auto insurance. We do have a standard list of questions that we ask every time we talk to a new client. Make sure your agent is asking those but if your agent is not and not willing to talk to you about that, fire that agent and get another one.

I hope this top 10 has helped you make more informed decisions about buying your auto insurance. If your insurance agent is not willing to talk to you about these things, you need to fire them and find another agent because you deserve to know and understand these things.

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Thank you,

Beaux Pilgrim, CEO

Dave Ramsey Endorsed


Beaux Pilgrim
Reed Insurance

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