8 Common Car Insurance Mistakes To Avoid

une cliente serre la main d’un agent d’assurance auto.

Is your auto insurance up for renewal? While you may choose to simply stick with your existing coverage, this may be a chance to review with your insurance agent.

Be sure to check out this article to avoid common mistakes people make with car insurance.

What are Common Mistakes People Make With Their Car Insurance?

Keeping Home and Auto Policies Separate

Not Inquiring About Discounts

Omitting Important Details

Not Listing All Drivers in the Household

Changing Your Driving Habits or Modifying your Vehicle

Picking the Wrong Deductible

Overlooking Optional Coverage

Not Reviewing Policy Details and Conditions

Keeping Home and Auto Policies Separate

Allstate, for example, provides a discount when customers bundle their car and home insurance. So, if you are looking renewing your car insurance, look to see if they offer home insurance too.

Not Inquiring About Discounts

Most car insurance companies offer discounts; here are some that Allstate offers:

  • Good Student discount – Allstate provides a Good Student Driver Discount. If you attend school over 100 km away from your postal address, you could be eligible for a discount.
  • Driving School – Newly licensed drivers could also take a recognized driver safety course to lower their premium.
  • Retiree discounts – Drivers over 65 years can enjoy a Retiree discount, or if you have been with Allstate for more than three years, you could take advantage of a renewal discount.
  • Disappearing deductible – As a safe driver, you could save up to $100 on your deductible every year you go without making a claim with Allstate’s Disappearing Deductible.
  • Drivewise® discount – By monitoring your driving habits for a minimum 1,000 km within a six-month period, the Drivewise app could reward you with up to 30% off your annual premium.
  • New car discount – If your car has advanced driver safety features, you could be eligible for a discount.
  • Private Parking – You may be eligible for discounts if your car is parked in an underground parking compared to overland parking.
  • Winter Tires – You may be eligible for discounts if you switch to winter tires during the season.

Be sure to also ask about discounts available for new customers.

Omitting Important Details

It’s important that you are transparent with the information you provide to your insurance company. Your insurance is there to protect you and the things you value most. If you do not disclose information accurately, you may find you don’t have the coverage you need when you file a claim.

It’s also important to note that there are serious consequences if you misrepresent the information you provide to your agent.

Not Listing All Drivers in the Household

Similarly to the above, it’s important that you inform your insurance provider of anyone who will be driving your car – even occasionally. This is to ensure that they have the proper coverage if they are involved in a collision.

There are scenarios where you don’t need to include a driver on your policy – for example, if someone is driving your car only once. However, it’s important to let that driver know that if they are taking your car, their driving infractions (e.g., speeding, red-light tickets) could affect your renewal rate.

Changing Your Driving Habits or Modifying your Vehicle

As mentioned in one of our previous articles, your car insurance premiums are calculated based off several different factors – including your car’s make and model, year, location of residence and your age and driving history. Therefore, any changes to these factors can mean changes to your vehicle’s insurance coverage.

For example, it’s important that you keep your provider up to date of any changes to your driving habits (including total kilometres traveled) or car modifications (engine upgrades, enhanced braking systems, or installing spoilers, skirt kits, lighting, etc.).

By being transparent with any changes to your vehicle, you’ll ensure that you’ll have appropriate coverage.

Picking the Wrong Deductible

A common mistake people make is choosing the coverage based on how its presented, and not customizing deductibles based on the rates offered. In some cases, you can save money by increasing the deductible (the amount you pay for in an insurance claim). In other cases, the deductible may not have as much of an impact. Your agent can review the options with you.

Overlooking Optional Coverage 

We know that car insurance is mandatory in Canada, therefore you’ll receive – at minimum – the following:

  • Liability coverage – Protects you if you are in an accident and you are held liable for the injury to or death of other people. It also covers damage to their vehicle or property.
  • Accident benefits – Covers medical bills, rehabilitation, funeral costs, and loss of income due to disability (not applicable in Quebec).

In some provinces, the following coverage options are not automatically included in your policy (unless stated otherwise by your insurer) and may need to be added on:

  • Direct compensation property damage – Covers you for damage to your vehicle and to property inside it when another motorist insured in your province is responsible for the accident.
  • Collision or Upset – Coverage for when an automobile is involved in a collision with another object or tips because of the insured.
  • Comprehensive – Coverage for non-collision related damages (such as theft or hail damage).
  • All Perils – Coverage for any losses due to theft (or attempted theft), any weather-related damages (caused by fire, lightning, windstorm, hail, or rising water, earthquake, etc.).

And while it may be tempting to get the most basic policy to save on cost, you would miss out on additional coverage that could be useful. These include:

  • Claim Forgiveness – Protects your rates if you have a covered claim.
  • Disappearing Deductibles – At Allstate, your deductible is reduced $100 for every year you go without making a covered claim.
  • Loss of Use – Should your car be damaged, this can help with the cost of a rental car or taxi.
  • Damage to a Non-Owned Vehicle – Can provide coverage if you damage a car you do not own, such as a rental vehicle.
  • Waiver of Depreciation – This option ensures you get the full value of your new car (less than 36-months-old) if it is written-off as part of a covered claim.

Not Reviewing Policy Details and Condition

Before you purchase insurance, it’s important to review the details of your policy, any conditions, and exclusions. This will allow you to have a better understanding of your coverage.

When shopping for auto insurance, consider speaking to the agent or broker and ask them if there are common mistakes they’ve encountered with customers . They may be able to share lessons and advise you on how to avoid making the same mistakes.

Never be afraid to ask questions!

Disclaimer: This information and the websites referenced are provided for your convenience only and should not be construed as providing legal or insurance advice. Allstate does not control or guarantee the accuracy of any content on any third-party site.  Allstate is not responsible for the privacy practices of any third-party site.