5 Mistakes To Avoid When Purchasing Car Insurance

DrivePine

June 12, 2024
by
Team Pineapple

You’ve probably heard you need insurance often if you have a car. And before you get your hopes up, we’re not here to dispute that fact but re-emphasise it; you need car insurance.

Car insurance is essential for any car owner; it protects not only the driver but passengers, pedestrians and other motorists in the event of an accident.

Suppose you’re ever involved in a collision. In that case, your insurance policy helps cover the cost of damages to your car as well as another driver’s vehicle.

One of the primary reasons car insurance is so vital is it provides financial protection

With adequate coverage, you can shoulder the financial costs, which can be significant and potentially devastating.

Now that you’re clued up on why insurance is necessary, we’re sure you can’t wait to jet off and take up a policy today.

But don’t get carried away by the excitement of new policy possibilities; a few pitfalls could transform your insurance experience from blissful to burdensome in the blink of an eye.

The 5 commonly committed mistakes to look out for in car insurance are:

  1. Not shopping around for different quotes.
  2. Choosing the minimum coverage available.
  3. Not Considering All Available Discounts.
  4. Failing to Disclose All Drivers Who Will Be Using the Vehicle.
  5. Not Reading the Policy Carefully.

To ensure you’re adequately covered and protected, avoiding the above mistakes when purchasing an insurance policy and working with a reputable insurance provider is essential.

Read more to find out how exactly you can prevent yourself from making the same mistakes so many people have before you.

Mistake no. 1: Not Shopping Around For Quotes

Limiting your search for a good, quality policy and only considering one insurance provider is a great disservice to yourself.

A consequence of not shopping around and comparing quotes from different insurances is paying more crazy-expensive premiums than necessary.

Insurance companies have varying premiums, excesses, overall prices, different coverage options and other benefits.

Not shopping around means you might miss out on great deals like lower rates or discounts that could save you money.

Additionally, not all insurance providers are made equal, and neither is their customer service.

Shopping around allows you to avoid being stuck with a company with terrible customer service that may end up frustrating you in the long run when you need to file a claim or have questions about your policy.

But before comparing quotes, it’s vital to determine what level of coverage you need, including liability, collision, comprehensive and other additional coverages.

Once you know what coverage works best for you, contact different insurers online, on their respective apps or by directly placing a call and speaking to an agent. 

Make sure your comparisons have similar policies, coverage options and premiums – that way, you can compare idiomatic apples to apples.

Before you pull the trigger on an insurance company, research the company’s reviews and ratings to examine the scene. This will give you an idea of how they handle their claims process and overall customer satisfaction.

Then finally, review the policy details and carefully ensure it meets all your insurance needs and covers your requirements, considering any exclusions or limitations that can affect your policy.

Mistake no. 2: Choosing the minimum coverage available

Another common mistake people make is skimping on the costs of their policy. Unfortunately, when choosing to get insurance, the main deciding factor is how much they’ll pay every month.

And while saving on the monthly premium may seem like a safe bet at the present moment, this decision might come back to haunt you later on.

The cheapest, most affordable insurance is often that way for a  reason.

The trick with insurance is that what a policy lacks in coverage, they make up for in affordability; take a moment to consider what this really means – having an inexpensive insurance policy means you’ll sacrifice extensive, quality coverage.

So, in the event of a claim, you might discover that your cover does not extend to the incident you’re claiming for.

For instance, if you only have third-party liability (that only protects another driver’s vehicle or property should it be damaged by your car) but you’re involved in a collision, are a victim of a carjacking, or your vehicle is damaged by a fire, your insurance would leave you out to dry.

Since none of these incidents are included in your policy, you’d have to pay for any damages or repairs without the help of the insurance.

After you’ve gotten over that hurdle, there’s also the challenge of determining appropriate levels of coverage.

Determining the right level of coverage for you can be tricky; there’s a lot to consider, including the car’s value, the risk associated with a motorist’s driving habits, and the potential financial impact of an accident.

The best place to start is by assessing your needs; that way, you know what you’re looking for when searching for an insurance policy. 

Consider the value of your car, the frequency with which you drive and your driving record.

Next is for you to understand the different types of insurance policies offered, be it comprehensive, third-party or third-party fire and theft; each policy has its own specifications tailormade to suit different drivers.

Knowing the difference will assist you in deciding which coverage option is best for you.

Lastly, you must also consider your risk factors; is there a likelihood of a collision-related accident? Is your area prone to flooding or other natural disasters? And what about safety, is your car at risk of being stolen?

If you’ve answered yes to all the above questions, you might need to consider additional coverage options.

Mistake no. 3: Not Considering All Available Discounts

The mistake of not considering all available discounts is understandable because, with all the many insurance companies offering different types of insurance policies, it may be hard to keep track of who’s offering what.

Not keeping your options open when it comes to car insurance discounts could potentially lead to you missing out on savings that can be applied to your policy and premiums.

Discounts are available to drivers who meet certain criteria such as being a safe driver, one’s insurance history, having a good credit score, and owning a vehicle with safety features.

Being a safe driver involves having a clean driving record and not having prior accidents or traffic violations. Insurance providers find profiles like these desirable and, thus, are more willing to offer discounted premiums.

Another good way to get a good premium discount is by having multiple insurance policies.

You may be eligible for multi-policy discounts if you have multiple policies with the same company, such as car and home insurance.

And these days, many insurers recognise that people just aren’t driving like they used to, so they devised a way to help their customers save based on their car usage.

If you can’t drive your car for whatever reason, whether working from home or having multiple vehicles. In that case, you can save thanks to usage-based policies.

Insurance providers consider drivers who use their cars less often to be less of a risk, which can lead to lower premiums.

To know how to identify and qualify for available insurance discounts, start by researching which discounts are offered by different insurers.

Look for information on different companies’ websites and apps, or request a call from a sales agent to learn more about any available discounts. 

And once you’ve identified which benefits are available, check their eligibility requirements. 

For example, as we mentioned earlier, safe driver discounts are available but demand a clean driving record, while low mileage discounts require you to drive less than a specified amount of kilometres per month/year. 

So it’s best to know which discounts you’ll qualify for.

Finally, the most straightforward way to know which discounts are available is by directly communicating with your insurer.

Be bold and ask your insurance provider which discounts they have in store. They may have deals that aren’t widely known because they don't advertise them, or you may not have thought of them.

Ask about any new discounts available since the last time you renewed or reviewed your policy.

Mistake no. 4: Failing to Disclose All Drivers Who Will Be Using the Vehicle

Insurance is all about trust and only works with complete honesty and full disclosure between both parties.

Failing to disclose all the drivers using the insured vehicle has severe ramifications for your car insurance company.

If an undisclosed driver’s involved in an accident while driving your insured car, your insurance company may deny your claim. This means you’re responsible for paying for any damages or injuries. 

Additionally, your insurer may also choose to cancel your policy altogether.

Insurance companies may view undisclosed drivers as a higher risk and charge higher premiums to cover that risk.  In other cases, the insurer may require you to add the unknown driver to the policy, resulting in higher premiums in the future.

Another effect of failing to disclose another driver using the car is that legal consequences are possible.

If said undisclosed driver gets into an accident, not only could you be stuck paying out of pocket for the damages, but you could be held liable and legal action can be taken against you, including lawsuits and financial penalties.

Ensure everyone who will be behind the wheel of your car is insured by understanding your policy requirements.

Read the policy carefully to understand the requirements for disclosing additional drivers.

Next, keep an accurate record of who, what, when, why and how.

Be it family members, friends or other individuals who may use your vehicle from time to time. Make sure you have their details, such as their full names, licence details, insurance history and any other information the insurance company may ask you to provide. 

It’s your responsibility to ensure that the details you provided are accurate, which includes previous tickets, accidents or other relevant information.

Mistake no. 5: Not Reading the Policy Carefully

The final mistake in this series is not carefully reading your policy, if you’ve even read it at all.

Many people make the mistake of going into their insurance agreement blind. They don’t realise that insurance is, in fact, a contractual agreement.

Car insurance policies can be complex, so you need to read your insurance policy to avoid misunderstandings about your coverage, leaving you without the protection you need.

Also, if you don’t understand your policy, you might be shocked by unexpected costs when it comes time to file a claim. This can be especially challenging if you’re facing significant expenses related to an accident, such as repair costs.

Furthermore, you must read your policy carefully to realise that you have adequate coverage for your needs; otherwise, you’d be exposed to significant financial risk.

By taking the time to understand your policy, you can ensure you have the coverage you need to protect yourself and your finances in an accident.

Conclusion

And those are the 5 commonly committed mistakes people make regarding their car insurance policies.

For anyone with the memory of a goldfish, no judgement here; we’re happy to recap our lengthy tale. 

Not shopping around for quotes, choosing the bare minimum coverage available, not considering available discounts, failing to disclose all drivers who’ll be using the vehicle, and not carefully reading the policy are the five mistakes to look out for and ensure you don’t commit.

Avoiding these mistakes and ensuring that your policy provides adequate coverage to protect you and your finances in an accident.

By taking the time to understand your policy, keeping accurate records of all drivers, and ensuring that all drivers are properly disclosed and included in the policy, you can save yourself a lot of hassle and have peace of mind knowing you’re protected. 

It’s vital to regularly review and update your policy to ensure it continues to meet your needs and provide the cover you need.

If you haven’t reviewed your insurance policy yet, now’s the time.

Take the time to carefully read through your policy, and make sure you fully understand the policy and terms. 

If you have any questions or concerns, don’t hesitate to contact a trustworthy insurance agent for guidance.

Working with a reputable insurance agent helps ensure that your coverage needs are met and that you have the protection you need. 

Don’t wait until it’s too late – take action now by reviewing your policy immediately.

Wow, you've actually read this far? Color us impressed! Now, do something unpredictable – get a quote! Trust us, it's the least regrettable decision you'll make today. Go on, surprise yourself (and us)!

Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply. Premium is risk profile dependent.

Team Pineapple

Team Pineapple comprises our company’s top talents, who are dedicated to creating clear, high-quality content on essential vehicle insurance topics. This diverse group, including actuaries, accountants, data scientists, and insurance professionals across South Africa, collaborates to produce enlightening and empowering articles.

Each piece is thoroughly researched, factually accurate, and rigorously reviewed to ensure quality.

*We say they’re the finest because we want them to keep writing for us!

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Disclaimer

Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.

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