3 Very Common Auto Insurance Mistakes You Never Want To Make to Save Money in the Long Run
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UPDATED: Jul 6, 2020
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Having car insurance is supposed to give you peace of mind.
It limits your liability in an accident and protects you from financial catastrophe.
That said, there are a few BIG mistakes policy owners sometimes make that you want to avoid.
These blunders could cost you hundreds, if not thousands of dollars, so pay close attention.
I’m going to break down the mistakes you really don’t want to make when dealing with your car insurance provider.
|Waiting too long to file a police report after an accident.|
|Lying about or exaggerating an injury during a personal injury claim.|
|Taking the first auto insurance quote you get.|
Waiting too long to file a police report after an accident
Getting a police report after an accident is one of the most important things you can do.
It usually speeds up the claims process and it can be used to ensure that you can proper compensation.
A police report after an accident can also help to prove fault, protecting you from increased rates in the future.
In some cases, the other party in an accident may ask you to settle instead of getting the police involved.
In simple terms, it’s NOT worth it – no matter what they promise.
Let me explain.
|Steps to file a claim after an accident.|
|Collect all the required documentation.|
|Contact your car insurance provider.|
|Contact your claims adjuster.|
|Keep copies of everything.|
Most states require you to file a police report with 24 hours of an accident.
Some states, such as New York, give you a little more time beyond the first 24 hours.
However, it is much easier to support your case if a police report is filed at the scene of the accident.
Not filing a police report can make it difficult for the insurance company to prove the other party is at fault.
That means you’ll be on the hook for your deductible.
Further you could have a hard time getting adequate compensation for personal injury.
The later you file a claim and/or delay calling the police, the higher likelihood your claim will be denied.
A few years ago, a good friend of mine stopped at a stop sign in a local neighborhood.
Then was rear-ended by a pickup truck.
The pickup truck was owned by a local landscaping company and was driven by an employee.
My friend got out of his car to assess the damage.
The damage wasn’t extensive, but it was enough to warrant filing an insurance claim.
Within minutes, the owner of the landscaping company was at the scene of the accident.
He asked my friend not to call the police to file a report or to file an insurance claim.
|Cost to repair||Deductible||Out-of-pocket expense|
He said he’d pay him extra beyond the cost of repairs.
My friend wasn’t crazy about the idea… after all, he was paying for car insurance for a reason.
However, the damage to his car didn’t seem so bad.
Plus, getting a little extra money while getting his car fixed sounded like an added bonus.
The next morning, my friend brought his car into a body shop for a repair estimate.
With a repair cost estimate in hand, he called the number provided by the company owner at the scene of the accident.
When he told the owner the estimated repair cost, the owner said it sounded reasonable and that he would call my friend back later.
That call never came.
The next day, he called again, and was told that the owner was out on a job and would get back to him.
As explained, the initial out-of-pocket expense is $500 or the cost of the deductible. Since it was too late to file a claim and he/she didn’t file a police report? Their monthly premium went up. In this instance, the premium increased from $65 to $101 a month. Or over $400 per year.
Waiting too long to file a claim & police report
After a week, my friend gave up and decided to call his insurance company to file a claim.
Unfortunately, the time to file a police report had passed.
The owner of the landscaping company claimed that my friend was at fault and that my friend cut him off to cause the accident.
Since my friend never filed a police report, his insurance company decided that they could not prove the other party was at fault.
My friend was on the hook for his deductible and got stuck with an increased rate in the following years.
What should have been an open and shut case for my friend became anything but that because he failed to file a police report in time.
Lying about or exaggerating an injury
Personal injury claims after an accident can be quite costly for insurance companies.
That’s why they investigate accident injury claims.
After all, the less money they dole out for injury claims, the more money they add to their bottom line.
Providing false information to a car insurance company can be used to VOID any claims.
These private investigators may monitor your social media accounts, track your activities and routines, and even conduct stakeouts to see if you’re really injured.
If you’re found being dishonest about your symptoms and injury, you can bet that your insurance company will use that against you.
That doesn’t mean you should understate your injuries or symptoms to avoid surveillance.
It also doesn’t mean you should lock yourself to avoid being monitored.
Instead, be honest about your symptoms and follow your doctor’s restrictions.
While at a family barbecue late last summer, I had a conversation with my wife’s cousin.
He worked as a private investigator, contracting his services out to some of the bigger car insurance companies.
To say he loved telling stories would be an understatement.
Anyways, one story that caught my ear was about a young man who claimed he tore his knee up in an accident.
The other party’s insurance company hired my wife’s cousin to monitor his activities because his injury was not consistent with his accident and paying out his claim would be costly.
During the first week, there weren’t any obvious inconsistencies during my wife’s cousin’s investigation.
He was on crutches every time he left the house, and his social media accounts were silent.
Week two, however, presented a different story.
First, it was an Instagram story of the young man jumping into a pool.
The guy had tagged one of his friends in the story, and that account had a video of the “injured” man at a pool with his friends.
Sure enough, the following day, my wife’s cousin spotted him walking leisurely to his car with no sign of injury.
He followed him to a local park with a basketball court and found him playing a pickup game with some friends.
Busted with evidence
A few photos and yet another Instagram story later, the insurance company had all the evidence they needed for an open-and-shut case.
The young man’s personal injury claim was denied.
It is possible that the young man was, in fact, injured in the accident.
However, he was not honest about the extent of his injuries, and in the end, it cost him his claim and left him on the hook for any medical bills.
Talk about an insurance blunder.
What struck me most about the story, though, wasn’t even the brazen disregard of the young man.
It was actually what my wife’s cousin told me afterwards… that only those that grossly exaggerate their injuries or symptoms need worry about having their activities monitored following an insurance claim.
As long as you see a doctor after your accident and follow the restrictions they give you, you’ll be able to avoid making this costly car insurance mistake.
Taking the first auto insurance quote you get
I think most people will agree that shopping for car insurance is not exactly fun.
Comparing car insurance quotes may seem intimidating.
Let’s be honest, there’s probably a lot of other things you’d rather be doing.
It’s tempting to take the first auto insurance quote you get instead of shopping around.
That temptation, however, could cost you hundreds of dollars in premium costs, and even more if you ever need to file a claim.
That’s why I consider not shopping around to be one of the biggest insurance blunders you can make.
Illustrated above is the last time the percentage drivers with an active car insurance policy got a quote. For example, 25% of drivers had gotten a quote in the last six months.
The truth is shopping for car insurance has never been easier.
Car insurance quote comparison tools let you see what your getting from insurers and how much it will cost you.
They offer a side-by-side comparison of each plan.
And you get the lowest deductible and the highest liability limits for the most affordable premium.
Quote comparison tools often connect you directly to an agent in your area, doing all the hard work for you.
They’ll help you pay a lower premium without the stress that sometimes comes with shopping around.
You’ll know exactly what your getting from your car insurance policy.
Plus you’ll get the best deal in the process, saving you big on your premium.
And offering you maximum protection for your money.
I can’t stress it enough. Don’t make the mistake of agreeing to the first car insurance quote you get.
Use a quote comparison tool – in the end, you’ll be happy you did.
To sum it up…
We get car insurance to protect us in unfortunate circumstances.
We pay for the peace of mind that its there if we ever really need it.
The truth is that each of the three mentioned car insurance blunders are easy to avoid.
By using readily available tools, being honest and upfront when making claims, and using the car insurance you pay for, you’ll get more out of your money and avoid making these three costly car insurance mistakes.
Frequently Ask Questions
What should you say to your car insurance company after an accident?
Immediately after an accident you should notify the police.
You don’t want to notify your insurer immediately since you may be in a state of shock or confused.
Take care of your medical needs and focus on getting the police to the accident.
Should you ever admit fault after an accident?
Even if it is glaringly obvious you are at fault, you should never admit it to your insurer.
Once you admit fault, you and your auto insurance company become legally responsible for paying all damages.
What happens if I get caught lying to my car insurance company?
If you are caught in a fraudulent claim, you’ll be responsible for any costs your insurer was responsible for.
You could face fines, probation, and/or jail time.
How many car insurance quotes should I get?
You should get at least 3 online quotes or from different agents.
This is to evaluate the price and coverage.
Compare each policy to be sure each have comparable coverage and deductibles.
Most important, understand coverage limits.