Common Mistakes that Can Increase Your Car Insurance Rates

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for for over a year and enjoys creating content that offers expert advice on car insurance topics.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Mar 13, 2020

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Car insurance rates vary widely between drivers. Obviously, drivers with a history of accidents will pay more for car insurance than drivers with a clean record. However, there are plenty of common mistakes that can increase your car insurance rates regardless of your driving history.

Today, we’re highlighting a few of the common mistakes that can increase your car insurance rates.

Lying or Accidentally Omitting Data

common auto insurance mistakesSome drivers deliberately lie on their car insurance quote form. They might fail to report a minor accident that happened five years ago, for example.

Other drivers accidentally lie on their car insurance: they might claim their car is a 2015 model when it’s really a 2016, for example.

Lying or accidentally omitting information from your car insurance application can increase car insurance rates.

Car insurance companies will research your application during the “discovery” period after you submit your application. The insurer is verifying all of the information you’ve submitted. If the insurer discovers something incorrect on your form, then it could lead to higher insurance rates. Or, the insurance company might cancel your entire policy.

In some cases, an error won’t be discovered until after you’ve made a claim. You might list yourself as the primary driver, for example, when your son is really the primary driver. This could jeopardize your claim and cost you a lot of money: an insurer might refuse to cover your claim after an accident, which means you might pay thousands of dollars out of pocket.

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Cancelling your Previous Insurance Policy Too Early

Car insurance gaps can be devastating: you might cancel your policy a few days before your new policy comes into effect. If you get into an accident during this gap, then you’ll likely have to pay for damages out of pocket.

One of the confusing parts about car insurance is that car insurance policies typically end at 12:01am on their expiration date. If you’re switching to a new policy, then you might cancel your old policy to end on October 25 and then start your new policy on October 26. You assume you’re covered – but there’s actually a full day’s gap in car insurance coverage.

Make sure you understand exactly when your old policy ends. Don’t leave a gap in coverage.

Failing to Research Discounts

Car insurance companies are for-profit businesses. They’re built to make money from customers like you. That’s why many car insurance companies won’t offer their best discounts until you ask.

Most people are aware of discounts for safe driving. Many people don’t realize, however, that there are discounts available for good students. Some car insurance companies give discounts to government employees or first responders. Others give discounts just for having anti-lock brakes.

Here are a few of the discounts available from many car insurance companies in the United States:

Research discounts on your own. Or, call your insurance company. When you fail to research discounts, you’re leaving money on the table.

Practicing Unsafe Driving Habits

This one is obvious: if you practice unsafe driving habits, then you’re more likely to get into an accident. Getting a single speeding ticket might raise insurance prices significantly, for example. Tailgating someone can lead to a fender bender. Driving recklessly or under the influence is a surefire way to raise insurance rates.

Car insurance companies love safe drivers. That’s why they reward safe drivers with lower insurance prices. Safe drivers can get steep discounts on car insurance. The more years you go without a claim, the bigger your discount can be.

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Buying Only Basic Liability Coverage

Many drivers choose to save money by buying basic liability coverage, which is the bare minimum required in most states.

Yes, buying bare minimum liability coverage can save you money today. However, it can cost you significantly more in the long run. A single claim can wipe out any savings you accrued.

Many people are unaware that basic liability coverage only covers damage to other people and property: it does not typically cover damage to your own vehicle. If you’re in a collision, then you’ll need to pay for your own repairs out of pocket.

Failing to Compare Auto Insurance Quotes Regularly

Today, there’s no excuse to avoid comparing car insurance quotes. Anyone can compare car insurance quotes in minutes online. GEICO is famous for advertising that 15 minutes could save you 15% or more on car insurance. It’s true! If you spend 15 minutes comparing car insurance quotes online, then you can save a significant amount on car insurance.

Car insurance companies rely on the fact that drivers are uncomfortable with switching providers. They rely on the idea that drivers won’t compare quotes online. Don’t be one of those drivers. Spend a few minutes comparing car insurance quotes online to ensure you’re paying the best possible rates.

By avoiding the common car insurance mistakes above, you can avoid paying too much for car insurance.

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