Insurance quotes from an insurer are estimates of the cost of insurance based on the information you supply when you’re thinking of purchasing a policy. They’re a powerful tool for ensuring you get the right coverage at the best possible price. However, it’s also possible to make missteps that can lead to higher rates. Here’s a look at four mistakes people make when shopping for insurance quotes.
Not Shopping Around
In most cases, the biggest mistake people make when shopping for insurance is not gathering insurance quotes from several insurers. Every company is different, and they use unique – and often proprietary – algorithms to set pricing. While the calculations are supposed to assess applicants from a purely risk-based perspective, some research indicates that isn’t always what occurs.
Shopping around allows you to ensure that the price you’ll ultimately pay for coverage is fair. You can examine rates for similar policies by gathering quotes from several insurers and doing line-by-line comparisons to assess the value you receive for your money, making it easier to get a good deal on the exact coverage you need.
Setting the Wrong Deductible
When you’re shopping for auto, homeowner’s, renter’s, or other types of property insurance quotes, you typically get a chance to choose your deductible. Depending on the insurer, a deductible as low as $0 may be an option. On the higher end, choosing an amount up to $2,000 or more is potentially possible, depending on the type of insurance you’re shopping for.
Generally, the lower your deductible, the higher your premium. That’s because lower deductibles mean you pay less out of pocket if there’s a qualifying incident, and the insurer pays more than if your deductible was higher.
As a result, you need to choose an appropriate deductible based on your personal situation. Consider what you can afford to pay out of pocket if you need to file a claim, such as the amount you have saved in an emergency fund. That allows you to keep your premiums lower.
Lying About Their Driving Record
If you’re getting an auto insurance quote, the application may ask for information about your driving record. For example, you may need to state the number of accidents or tickets you’ve received over the past few years.
Usually, past accidents and tickets lead to higher car insurance rates. While it’s tempting to lie about your driving history to get a lower quote, insurers will figure out that you weren’t honest. Typically, they’ll get an official report from a suitable government agency before issuing your policy. As a result, they’ll notice the falsehoods and adjust your pricing accordingly at that time.
Since that’s the case, being honest is the better choice. That ensures your quotes are as accurate as possible, making it easier to compare what you’ll actually end up paying.
Not Looking for Enough Coverage
When you look for insurance quotes, insurers are required by law to offer a minimum amount of coverage based on state requirements. However, you have the ability to secure higher coverage levels in most cases. For example, along with raising the maximums for liability, collision, and similar base coverage, there are usually add-ons that address specific situations you may want covered.
In many cases, it’s best not to default to the coverage minimums. Instead, consider what you’d genuinely need to recover after the various types of qualifying incidents. By doing so, you’ll end up with a policy that offers you the right level of protection.
