October 2015
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Auto Insurance Buying Mistakes to Avoid
Having insurance doesnít mean you have to pay through the roof

Everyone knows that having the right insurance is crucial in the event of the unforeseen, but that doesnít mean all insurance is the same. A few helpful tips can help make sure you donít pay more than you need to. 

The first thing you want to do is make sure that you have the proper coverage. Some people sacrifice the proper coverage to save a few dollars, only to find theyíre not fully covered when they need that coverage most. Simply put, the cheaper policy isnít necessarily the best policy. You also want to make sure that you understand everything your policy covers. 

ďMake sure youíre shopping apples to apples and getting quotes based on the same coverage that you have,Ē says Lori Conarton, a spokeswoman for the Insurance Institute of Michigan.  

Not getting the cheapest policy doesnít mean you canít find any discounts. In fact, some insurance companies offer discounts for being accident-free or for having specific features, like auto alarms or vehicle telematics, like OnStar from GM or Blue Link from Hyundai. There are also occasional discounts for being a member of a group like AARP or even AAA. You can always ask what discounts are offered so you can see what you may qualify for.  

Kiplinger magazine noted that setting your deductible too low is a big mistake too:  

ďWith low auto and homeowners insurance deductibles, you often pay more in premiums than you can recover in claims. Low deductibles also encourage you to make small claims, which could cost you a claims-free discount or prompt your insurer to drop you.Ē  

They added that raising your deductible from $200 to $1,000 can lower your premiums by as much as 40 percent. Just be sure to use some of those savings to build a fund in case you ever do need to pay a deductible.  

As with any important decision, you always want to do your homework so you can be fully prepared. If you donít know your needs, you may pay too much or, as mentioned before, not have the proper coverage. You also have to be truthful, as lying on your application can lead to a policy cancellation and even a refusal to pay your claims. 

Auto insurance, as well as your life, health and other policies, is a crucial piece of your financial well-being. Stop by today to learn more.


Published by Central Bank of Kansas City
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Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.  This is an advertisement.
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