4 big mistakes when applying for car insurance

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These mistakes could be costly to motorists.


Key points

  • Drivers must provide the required information when purchasing auto insurance.
  • Some motorists make costly mistakes during the process, such as failing to mention that their car is also used for business purposes.
  • This could end up leading to financial disaster.

Buying auto insurance can be a complicated process, and it’s important to get it right. This type of insurance provides a payment in the event of an accident, car theft, or if other problems arise. Many states require auto insurance coverage, and having the right protection can help drivers avoid financial disaster when things go wrong.

Unfortunately, motorists sometimes make mistakes when buying coverage and these mistakes can come back to haunt them. Knowing some common problems can help drivers avoid problems when buying protection. Here are four mistakes to be sure to avoid.

1. Do not reveal all drivers

Insurers need to know about everyone who will be driving a vehicle. That’s because the insurer is liable if someone causes a crash while behind the wheel of a covered car. If an insurer discovers that an undisclosed person regularly drives the car, it can lead to increased premiums or cancellation of coverage.

2. Guessing the miles traveled incorrectly

The more miles a person drives, the greater the chance that a collision will occur or something will go wrong. As a result, insurers ask about miles driven when setting premium prices.

Not disclosing this information accurately could result in higher than necessary premiums if a driver overestimates annual miles driven. And motorists who underestimate how often their vehicles are used could end up facing higher premiums or cancellation of coverage if insurers find out the truth.

3. Lying about your driving record

An insurer will ask questions about a motorist’s driving record when the motorist attempts to purchase insurance coverage. Being dishonest is unlikely to work well, as insurers will independently verify the applicant’s driver’s license record and accident history. Again, a lie on this subject could result in higher premiums, denial of coverage, or cancellation of coverage.

It’s always best to be honest up front to ensure insurance quotes are accurate and to ensure coverage won’t be canceled after purchase. Some insurers are more forgiving of past problems than others, but drivers can’t get an accurate idea of ​​their costs if they don’t disclose the truth in their claims.

4. Failing to mention that your car is used for business purposes

Motorists cannot assume that their car will be covered if it is used for business purposes. In fact, it is common for consumer insurance policies to exclude losses that occur in the course of business. This has become an especially common problem when so many people now use their cars for side jobs, like delivering food or driving for a ride-sharing service.

If a car is used for business purposes, it must be disclosed to the prospective insurer during the application process. That way, the insurance company can accurately assess risk and provide the option of additional business protection coverage, if available.

By avoiding these four mistakes, motorists can ensure they get the auto insurance coverage they need at a fair price, and that their policy doesn’t end up being canceled at an inopportune time. Car insurance coverage is too important to waste time on, so drivers should make sure they disclose all the information their insurer needs to help them get the right protection.

Make Sure You Select the Right Auto Insurance Coverage

Car insurance is something most people don’t think about very often. While there are several factors that drive people to look to switch auto insurance companies, it’s important to educate yourself to ensure you select the coverage that’s right for you. The right coverage means not paying for coverage you don’t need and not giving up coverage that would make sense for your personal situation. While price is an important factor, we also consider other factors, such as customer service and the claims process, when choosing what we believe to be the best auto insurance providers.

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