WHAT CAN GO WRONG?
The first problem is listening to the wrong advice. If you were to go and ask an insurance agent how much insurance to carry, the answer would give the agent the best possible commission on the deal. In other words, agents are offered cash rewards if they sell you the maximum possible amount of insurance, regardless whether you need it. So, when you are deciding how much insurance to buy, you should always take a practical view of the amount of cover and whether that offers good value for money. Sometimes, the basic minimum is all you need.
BUYING THE WRONG VEHICLE
Some people buy something they think fits their image without asking how much it will cost to insure. Equally, others forget to ask how much their vehicle costs to repair. With some imported cars, the price of spares is significantly higher than for cars made in local factories. The higher the cost of repairs, the higher the insurance premium. Similarly, the more likely someone will steal your vehicle, the more comprehensive coverage will cost you.
FAILING TO DRIVE SAFELY
Driving is the one thing more or less under your control. Although you can never guarantee to avoid being hit by someone driving like a lunatic, you can always drive within the speed limit and cut out all the reckless behavior. Do that and avoid claims, your premium rate will remain affordable. Rack up speeding tickets and get into accidents, and your rate will take off like a rocket. It’s your choice.
NOT KEEPING AN EYE ON YOUR CREDIT SCORE
The majority of insurers watch your score. If it falls, your premiums tend to rise. But a recent survey found 80% of credit histories contain mistakes. Many of these result in poor scores. You have a statutory right to free copies of the histories held by the three largest credit referencing agencies. If you find a mistake, you also have a right to have it corrected. Doing so may result in a higher score. If so, the premium will usually fall.
BEING PREPARED TO CHANGE INSURERS
You may be surprised, but the vast majority of people renew their policy on auto-pilot. Failing to look for alternate insurers denies you those welcome bonuses. It’s up to you to find what the market has to offer and act rationally, i.e. change insurers when the deal is right.