4 Signs You're Overpaying for Auto Insurance

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  • Car insurance is an essential purchase that protects assets.
  • Drivers need to get the right coverage at an affordable price.
  • Many people end up overpaying for their policy, especially if they get the wrong coverage or don't ask about discounts.

Don't spend more than necessary on your auto insurance premiums.

Every driver needs to have the right car insurance coverage in place. This means buying the minimum required auto insurance coverage as mandated by the state. And in many situations, it means purchasing even more protection than is required in order to be covered in case of a car theft or a collision the policyholder is at fault for.

But while it's important to have sufficient insurance coverage, drivers don't want to overpay as unnecessarily high premiums can eat into their monthly incomes. While it can be hard to tell if a driver is paying too much, here are four signs to watch out for.

1. You haven't shopped for insurance quotes recently

Not shopping for insurance quotes is the surest way to overpay for coverage. Insurers may actually penalize loyal customers by charging higher premiums if they expect the driver won't shop around for coverage.

Failing to shop around also means missing out on potential deals that other insurers may offer -- especially for those whose demographic situation or driving needs have changed.

Motorists should compare their coverage options by getting online quotes around once per year to make sure they have the most affordable insurance provider for their needs.

2. You have more coverage than you need

Sometimes, motorists have unnecessary insurance coverage. For example, a driver may end up paying extra for roadside assistance from their insurance company even though they have AAA and don't really need this add-on coverage.

Drivers with older vehicles that aren't worth much may also not need comprehensive or collision coverage, especially if their insurer would end up paying out very little after their deductible is met.

Paying for unnecessary auto insurance is nothing more than a waste of money, so drivers should review their policies carefully each year in order to make sure they have only the protection they need and no unnecessary types of coverage.

3. You haven't updated your insurer about reducing your miles driven

Many people are driving less these days as they've shifted to working from home during the pandemic and haven't returned to the office yet. Since a motorist who drives fewer miles faces a reduced risk of getting into a collision, their premiums should be lower. But auto insurers won't know that if the driver doesn't tell them.

Anyone who has changed their driving habits should be sure to alert their insurance company right away. The savings from driving fewer miles could be substantial over time, and there's no reason not to simply update the insurance company to start reaping the benefits.

4. You haven't asked about discounts

Many auto insurers provide various types of discounts. Savings might be available for getting good grades for teen drivers, or for membership in a particular organization or a job with a particular employer.

If a driver hasn't asked their insurer about opportunities to save, then they may be missing out on ways to reduce their premiums. It takes just a second to look into options to reduce costs, so it's worth a call to an insurer -- or a check of the company's website -- to see what savings opportunities exist.

By getting insurance quotes regularly, keeping an insurer updated, regularly reviewing coverage, and asking about savings opportunities, drivers can ensure they get the most affordable protection available to them. The little bit of effort required is well worth it.

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