Car insurance is not just a legal requirement in most countries—it’s also a financial safety net that protects you from unexpected losses. However, many car owners end up making costly mistakes when purchasing an insurance policy. These errors can lead to inadequate coverage, higher premiums, or even claim rejections.
In this article, we’ll uncover the top 7 mistakes to avoid when buying car insurance and help you make smarter decisions that can save you money and give you peace of mind.
1. Choosing the Cheapest Policy Without Reviewing the Coverage
One of the most common mistakes people make is opting for the cheapest car insurance policy available. While saving money is important, it shouldn’t come at the cost of poor coverage.
Why it’s a mistake:
- Cheap policies often exclude essential coverages like roadside assistance, zero depreciation, or engine protection.
- In case of an accident, you may end up paying large sums out-of-pocket.
What to do instead:
- Compare insurance policies based on coverage, claim settlement ratio, and customer reviews—not just price.
- Understand what’s included and excluded in the plan before purchasing.
2. Not Disclosing Accurate Vehicle and Personal Information
When buying car insurance, it’s crucial to provide accurate details regarding your car, driving history, and personal information.
Why it’s a mistake:
- Any misrepresentation can lead to a claim denial in the future.
- Insurers can cancel your policy if false information is discovered.
What to do instead:
- Be honest about your age, location, vehicle modifications, and previous claims.
- Upload correct documents and double-check all entries before submission.
3. Ignoring Add-Ons and Riders
Car insurance add-ons are optional benefits you can purchase for enhanced protection. Ignoring them to save a few bucks is often a poor decision.
Why it’s a mistake:
- You might miss out on valuable features like:
- Zero Depreciation Cover
- Roadside Assistance
- No Claim Bonus (NCB) Protection
- Engine Protection Cover
What to do instead:
- Evaluate your driving needs and risk exposure.
- Choose add-ons that offer the most value based on your car’s usage and location.
4. Overlooking the Insurer’s Claim Settlement Ratio
Claim settlement ratio (CSR) refers to the percentage of claims an insurer settles out of the total claims received.
Why it’s a mistake:
- Choosing an insurer with a poor CSR can lead to a long and frustrating claim process.
- There’s a risk of rejection even in genuine cases.
What to do instead:
- Select insurers with a CSR above 90% and positive customer feedback.
- Read online reviews and experiences shared by other policyholders.
5. Letting the Policy Lapse
Many car owners forget to renew their insurance on time. Driving without insurance is illegal and risky.
Why it’s a mistake:
- You lose continuity benefits like No Claim Bonus (NCB).
- There’s a gap in coverage, and you may be liable for all damages during that period.
What to do instead:
- Set up reminders or opt for automatic renewal.
- Renew your policy at least a week before the expiry date.
- Consider long-term policies for peace of mind.
6. Not Comparing Multiple Insurance Providers
Some buyers stick to the first quote they receive, often from car dealers or a single company.
Why it’s a mistake:
- You may end up paying more for less coverage.
- You miss the chance to avail discounts or better features from competitors.
What to do instead:
- Use online insurance comparison websites to evaluate policies side by side.
- Compare premium, coverage, network garages, and customer service reputation.
7. Ignoring Policy Terms and Exclusions
Not reading the fine print is a classic mistake. Every car insurance policy comes with certain exclusions that define what is not covered.
Why it’s a mistake:
- You may falsely assume you’re covered in a situation that’s excluded.
- Some policies don’t cover things like drunk driving, mechanical breakdowns, or illegal usage of the vehicle.
What to do instead:
- Carefully read the terms and conditions, especially exclusions and deductibles.
- Ask the insurer questions to clarify anything that’s unclear before buying.
Final Thoughts
Buying car insurance is not something to rush. Avoiding these 7 mistakes can help you choose the right policy, save money, and protect yourself from future hassles. A well-informed decision not only provides financial security but also peace of mind while you’re on the road.
✅ Key Takeaways:
- Don’t go for the cheapest policy without checking the coverage.
- Always provide accurate personal and vehicle information.
- Consider useful add-ons based on your driving habits.
- Choose insurers with a high claim settlement ratio.
- Renew your policy on time to avoid lapses.
- Compare multiple policies before buying.
- Understand policy exclusions and terms in detail.