7 Frequent Car Insurance Shopping Errors to Avoid

Skipping these steps could end up costing you a lot — possibly tens of thousands of dollars.

Comparing car insurance can feel slow and exhausting. Still, taking shortcuts can do more than waste money; it can also put your savings at risk.

Drivers should not go without auto insurance, but choosing the right insurer or policy still requires care. Even a minor mistake can have expensive consequences.

The mistakes below can easily cost you hundreds of dollars a year and, in some cases, reduce your net worth by tens of thousands of dollars.

1. Not comparing multiple quotes

You need to compare options to find a good car insurance deal — and to recognize one when you see it.

Rates can differ dramatically from one insurer to another, and comparing quotes can save you hundreds of dollars a year.

Online comparison tools make that easier than ever by quickly showing quotes from insurers in your area.

2. Choosing only by price

Picking an auto policy based only on cost can be a costly error.

A lower premium means little if you cause an accident and later discover your coverage is too limited. That kind of mistake could leave you responsible for thousands of dollars.

If you find a low-cost policy, be sure it still includes the protection and features you need. Money Talks News founder Stacy Johnson explains the process step by step in “How to Get the Best Possible Deal on Car Insurance (I’ve Saved Hundreds Doing This).”

3. Selecting only the minimum required by law

The minimum coverage required in your state is only that — a minimum. It may not provide enough protection.

Take liability coverage, which helps pay for injuries or property damage you cause to others. Stacy has called it “one area of your car policy where you don’t want to scrimp.”

If a court finds you liable for an accident involving serious injuries or major property damage, the minimum liability limits may not protect your savings. After the policy pays out, you could still owe tens of thousands of dollars out of pocket.

The Highway Loss Data Institute says the average bodily injury liability claim is $24,281. In some states, the required minimum per person is below that amount.

Florida, for instance, does not require bodily injury liability coverage at all. Check with your state insurance department to see what your state requires.

4. Failing to research insurer complaints

Before buying a policy, contact your state department of insurance to see whether there are complaints against the company you are considering.

Ask about enforcement actions and whether your state offers complaint-ratio reports. Those reports show whether an insurer receives more consumer complaints than average.

You can also look up insurer complaints through the National Association of Insurance Commissioners website.

5. Not comparing policies side by side

After narrowing your choices to a few policies, review them closely so you know the one you pick has the right coverage.

You may want uninsured motorist coverage, which helps pay when an uninsured driver causes an accident.

You may also want comprehensive and collision coverage, which help pay for damage to your vehicle and losses from theft or vandalism.

6. Paying for more coverage than necessary

Buying too little coverage is not the only problem. Overbuying can also waste money.

If you have few assets, you may not need a liability limit as high as someone with more to protect. If your vehicle would be inexpensive to replace, you might be able to carry less collision or comprehensive coverage — or drop it entirely.

Also watch for extras you do not need. If you already have an auto club that provides roadside assistance, there is no need to pay for the same benefit in your policy.

7. Renewing with the same insurer without checking alternatives

The car insurance market is highly competitive. Simply changing carriers can sometimes cut your costs by hundreds of dollars a year.

When your next bill arrives, review your current coverage and get quotes from other insurers to see whether switching would save you money. As reported, moving to a cheaper policy does not have to mean giving up coverage.

Online comparison tools can make the process faster and easier.

If you find a better price but prefer to stay with your current insurer, let your agent know. The company may match the offer or even beat it.