Car insurance is something every driver in the U.S. needs, but not everyone understands how it works. Many people end up paying more than they should, or worse, get stuck without proper coverage when something goes wrong.
In this article, we’ll explore the 10 most common car insurance mistakes people make—and how you can easily avoid them. Whether you’re buying insurance for the first time or reviewing your current policy, this guide will help you make smarter choices.
1. Buying Only the Minimum Required by Law
Most states require liability insurance, but that doesn’t mean it’s enough. If you’re in a serious accident, the minimum coverage may not fully pay for the damages or medical costs.
What to do instead:
Choose higher limits if you can afford them. A common recommendation is 100/300/100 (that’s $100,000 per person, $300,000 per accident in bodily injury, and $100,000 in property damage).
2. Not Shopping Around for Quotes
Many people stick with the same insurance company for years without checking other options. This can cost you hundreds of dollars annually.
What to do instead:
Get quotes from at least 3–5 insurers every year or two. Use comparison websites or talk to an independent insurance agent.
3. Ignoring Deductibles
Your deductible is the amount you pay before insurance starts covering the rest. Choosing the wrong deductible can hurt your wallet.
What to do instead:
If you want lower monthly payments, choose a higher deductible ($500–$1,000). Just make sure you can afford to pay it out of pocket if needed.
4. Skipping Collision or Comprehensive Coverage
If you only have liability insurance, damage to your own car isn’t covered. Many people find this out the hard way after an accident, theft, or weather-related damage.
What to do instead:
If your car is new or valuable, add collision and comprehensive coverage. If your car is older, compare the cost of coverage vs. the car’s value.
5. Not Asking About Discounts
Insurance companies offer discounts for good drivers, students, bundling home and auto, and even having anti-theft devices—but many people forget to ask.
What to do instead:
Ask your insurer to review available discounts. Even small ones can add up over time.
6. Letting Coverage Lapse
If you cancel your policy or miss a payment and your coverage stops, you could face fines, higher rates, or even license suspension.
What to do instead:
Always keep continuous coverage. If you’re switching providers, overlap policies by a day or two just to be safe.
7. Using Incorrect or Incomplete Information
If your insurance company finds out you gave the wrong information (even by mistake), they can raise your rates or deny claims.
What to do instead:
Be honest and accurate when giving details about:
- Where you park your car
- How many miles you drive
- Who drives the car
8. Not Understanding What’s Covered
Many people assume their insurance covers everything. Then, when something like a rental car or roadside assistance isn’t included, they’re surprised.
What to do instead:
Read your policy or ask your agent to explain it in simple terms. Know exactly what is (and isn’t) covered before you need to use it.
9. Only Focusing on Price
Everyone wants to save money, but choosing the cheapest policy isn’t always the best move. Low-cost insurance may come with poor service, slow claims, or very limited coverage.
What to do instead:
Balance price with value. Look at customer reviews, claim speed, and financial strength of the company—not just the price.
10. Forgetting to Update the Policy
If you move, buy a new car, add a driver, or change how much you drive, and you don’t update your policy, it could cause issues with claims later.
What to do instead:
Update your insurer anytime your situation changes. It could even lower your premium!
Summary Checklist: Avoid These 10 Mistakes
- ✅ Don’t buy only the minimum
- ✅ Shop around yearly
- ✅ Choose the right deductible
- ✅ Add coverage for your own car if needed
- ✅ Ask for discounts
- ✅ Never let coverage lapse
- ✅ Be accurate with information
- ✅ Know your policy details
- ✅ Don’t choose just based on price
- ✅ Keep your policy updated
Final Thoughts
Car insurance doesn’t have to be confusing or expensive. By avoiding these common mistakes, you’ll save money, reduce stress, and make sure you’re protected when you need it most.
Even small changes—like asking about discounts or updating your info—can make a big difference. So take a few minutes to review your current policy and see where you can improve.
Smart drivers don’t just drive carefully—they also make smart insurance choices.