So I spent about 10 or 11 years helping people purchase insurance for home, auto, umbrellas and all the main things for what we call personal lines.

I’ve learned a lot of things that people do and some habits that almost everybody has that are just the wrong ways to go about purchasing a policy. So in today’s article we’re going to talk about these seven ways or seven mistakes that people typically make when purchasing car insurance.

Now this kind of pertains to home and renters and all the other stuff as well, but it’s more geared towards the auto portion.

So let’s dive right into it.

Everybody Wants A Better Price

Number one is everybody wants a better price. That’s pretty common. Even when I teach sales people when you’re talking to customers, what’s the one thing that they want? They always want a better deal.

But they don’t think about all of the benefits that they can get on top of that. So when you have an accident or have a claim, if you just call around and start shopping and you don’t figure out what coverage you want ahead of time, you’re going to compare a whole bunch of different quotes against each other without being accurate to see whose is better and whose is worse.

Because you’re doing that you’re also not getting, a lot of the times, towing and road service. One company might quote it and one company might not.

Other companies might do rental car coverage, but how much are they giving you? Is it fifty dollars a day or is it thirty dollars a day?

Personally I like the lower amount because I’m willing to pay extra when I’m renting the car because it’s very rare that I have a claim.

So those are some things that you have to think about. Do you even want towing or are you going to buy an AAA membership?

There’s a lot of coverages that you need to learn and know about, which is what this whole channel is about, so don’t worry you’re going to learn it.

I’ve got a whole bunch of 101 articles on here if you are interested.

So that’s one of the main things that people forget to do. They don’t understand what they’re looking for.

In this process you really just need to ask yourself, what do I want? If I were to build the perfect policy do I need towing, road service, rental car coverage, gap insurance, a savings bank which is also called a vanishing deductible, or cash back?

Some companies offer two to two and a half to five percent back every six months to a year depending on your policy when you have no claims. By doing that that’s going to save you money long term.

You’re going to pay an extra portion or piece for that, but if you’re saving money on top of getting those coverages it might be worth it for you.

Mainly you’re going to get that money back at the end.

What I find is to have a whole package with certain companies you may only pay 100 to 150 dollars more a year, but it gives you 100 to 120 dollars back.

So essentially you’re only paying a couple dollars a month to have accident forgiveness, claims-free renewals, all of these extra benefits, upgraded towing and road service, and OEM equipment parts.

That’s the original manufacturer parts instead of the off-brand parts.

Most people want that especially if you have a Toyota, Lexus, Mercedes or one of the better cars that need those original equipment parts.

Not all policies are the same, so there’s huge differences between them.

I’m not trying to confuse you, but it’s good to know what options are out there and if companies will tick those boxes for you.

People Buy Higher Deductibles

The second mistake is people buy higher deductibles.

It’s something that I see commonly and I tested this a little bit with a few customers in the past.

This was back at a fairly not favorable position where we were just trying to sell anything and everything under the sun.

We would have long conversations with customers and you could tell they were droning you out because you kind of threw some fun exciting fake stuff into the call.

You would talk about something that made no sense at all and they would just be like, “Yep, sounds good. I got it.”

So be very careful and pay attention to the person on the other end and what they’re really offering.

Make sure they’re not raising your deductibles to make it look like a cheaper deal.

Understanding Discounts

Number four seems really basic, but there’s a really in-depth portion to it which is the discounts.

Understanding which discounts you’re qualified for and some discounts that you can get in the future is extremely important.

If you want to get more in depth with the discounts, there are a lot of savings that you can get that will knock the bill 10, 20 or even 30 percent down.

I personally use eight or nine discounts myself today.

That leads us into another important point which is asking enough questions.

Asking Enough Questions

I commonly see that people, when they get into a five to ten minute conversation, or if you’re quoting home with it it can be a twenty to thirty minute conversation because there’s a lot of details.

You have the square footage of your house, the type of cars you drive, who’s driving what, who lives in the house and many more details.

People tend to zone a lot of that out because they just want to get the final number and compare the price.

So don’t rush through the call.

If you’re talking with an agent live or if you’re doing it online, take a little bit of time.

It’s going to take a few more minutes to sink in and completely understand it.

If you’re dealing with an agent that has been seasoned or they know what they’re talking about then they’re typically going to make sure that they teach you something.

That’s the goal on every call I do.

I want to make sure you understand what you’re purchasing, that it gives you enough benefits and that I’m meeting your expectations as far as the value.

This channel always is about value-based selling.

When we talk about that it’s what is important to you or what do you perceive as valuable that I can include in the policy that will benefit you either now or in the future.

People Call Multiple Companies

One of the most important mistakes is using the old-school way to shop for insurance which is just calling different companies one by one.

If you have a list or you’ve been recommended several companies then sure, pick up the phone or go on their website and do the quote because those are likely going to be the best options for you.

But if you’re new and you’re just starting to shop, it’s going to take you days to find the right company.

The reason I say that is because most companies have been combined into one.

What that means for you is there’s apps and agencies that can quote multiple companies.

For example I work for an agency that quotes up to 17 different companies in 21 different states.

There’s a lot of reach and different places we can go.

There are also apps that quote multiple companies in multiple states up to 30 companies and you don’t even have to talk to a live person.

You can do it right on your phone, fill it out and even text them.

If you want a phone call you can do that too.

That’s great for those that want advice and need a hands-on option.

If you’re the type that wants to call three main companies then feel free to do that.

Also let the company know what state you’re in because that does play a factor in which company is typically best for your profile and your area.

Doing What’s Cheapest

Number six is doing what’s cheapest.

That kind of goes back to the first point where you’re just buying based on price.

Insurance is not always apples to apples.

You can compare apples to apples if you know what coverage you already have and you know you like the coverage.

But things change.

You move, buy a new car, get married or get a ticket.

All of this happens and the company that was great today may not be the company that’s great tomorrow.

Know that there are different options.

When you’re going from company A to company B, yes make sure the agent isn’t taking advantage of you, but also make sure it’s not just about price.

Agents understand that price is the number one thing people ask for, so they’re going to try their best to get you the best price.

But it doesn’t mean you have to cut the coverage to get that deal.

Getting Advice

That dives right into number seven which is getting advice.

The advice should come from somebody that’s in the industry or has had experience.

Typically a parent is going to be really good with advice if they know what they’re talking about.

Not everybody was taught insurance.

It’s no different than when you got out of high school or college and started budgeting and making adult money.

All of a sudden you ended up with bills and responsibilities and realized nobody taught you how to balance a checkbook.

It’s the same thing with insurance.

A lot of people just join their mom and dad’s policy because it was easy.

Then later their best friend tells them what they should do because they got a really good rate with another company.

But ask that person what coverages they actually have.

A lot of people don’t know what their liability limits are, what their property damage coverage is or whether they have a vanishing deductible.

If they understand what they purchased then great, take the advice.

But if they don’t understand it then you may not want to take advice from them.

Advice is freely given everywhere, so just be careful which pieces you’re listening to.

Bonus Tip

The bonus tip that I want to give you is when you find the deal that you want, make sure that you know what you’re looking for and don’t wait.

If you’re waiting because it’s a money thing or a time thing that’s perfectly fine.

But if you’re waiting because you’re just not quite sure it’s the right move, as long as you’ve compared everything and made sure the coverages are the way you like them and you like the price, don’t be afraid.

Some companies will knock six to seven to nine hundred dollars off your bill.

I’ve personally seen five thousand dollars cut off one person’s bill.

It’s amazing how giving somebody the right company and the best fit for the person can get them the best price.

Now I’m not saying you’re necessarily going to save that much.

Most companies save an average anywhere between four to eight hundred dollars depending on who you’re with and who you’re switching to.

But once again it falls back on the other pieces that we talked about.

If you didn’t understand any of this, feel free to go back and review the sections again.