Car Insurance Mistakes That Cost You Money (And How to Avoid Them). Car insurance is something most people buy and then forget about. You pay the bill every month, assume you’re covered, and move on with life.
But here’s the problem: Small insurance mistakes can quietly drain hundreds — sometimes thousands of dollars from your pocket every year.
The great thing is, these errors are usually simple to fix once you spot them.
Let’s go over some typical car insurance slip-ups that can drain your wallet – and how to dodge them. Read More…
1. Automatically Renewing Without Comparing Prices
Lots of drivers just stay with their current insurance company year after year without considering other options. It seems easy, but it often costs you more.
Insurance rates change all the time. The cheapest company last year might not be the best deal this year.
What to do instead:
Compare quotes at least once a year. Take about 15 minutes to check out 3–4 companies. You could save hundreds just by switching.
2. Choosing the Wrong Coverage
Some people overpay for coverage they don’t really need. Others underinsure and end up paying huge costs after an accident.
For example, if your car is old and worth very little, paying high full-coverage premiums may not make sense. On the other hand, too little coverage can leave you paying out of pocket.
What to do instead:
Match coverage to your car’s value and your financial situation. Don’t blindly pick the most expensive or the cheapest plan.
3. Ignoring Available Discounts
Insurance companies offer lots of discounts — but they don’t always apply them automatically.
You might qualify for savings for:
- Safe driving
- Bundling home + auto insurance
- Low mileage
- Student grades
- Anti-theft devices
- Defensive driving courses
If you don’t ask, you might miss out.
What to do instead:
Call your insurer and ask, “What discounts can I qualify for?” You might be surprised how much your premium drops.
4. Setting Your Deductible Too Low
A low deductible sounds nice because you pay less during a claim. But it also means higher monthly premiums.
If you rarely make claims, you’re probably paying extra money for no reason.
What to do instead:
Go for a higher deductible if you can handle it in a pinch. Doing this normally cuts your monthly bill big time.
5. Not Updating Your Information
Life changes — and your insurance should reflect that.
If you move to a safer area, start working from home, or drive less, your risk decreases. But if your insurer doesn’t know, you’ll keep paying higher rates.
What to do instead:
Update your details whenever something changes. Less driving or safer parking can reduce costs.
6. Paying Monthly Instead of Annually
Paying each month seems simpler, but lots of insurance companies charge extra if you do that.
Those little fees can really add up over the year.
What to do instead:
If you can, pay once a year or twice a year to skip those extra costs.
7. Filing Small Claims
Filing claims for every little scratch? It might seem smart, but it can hike up your insurance costs.
Sometimes, those small repairs end up costing less than the extra cost from higher premiums.
What to do instead:
Pay for those little dings yourself, and only file claims when there’s big damage.
Final Thoughts
Car insurance shouldn’t be a headache. Lower your premium by making a few smart choices, and still be protected.
Check your policy often, ask questions, and shop around a bit.
The point is not just to have insurance, but to avoid paying too much.
Spending a little time on this now can save a ton of money later.
