As a business owner, you may have employees who use company cars. Whatever your car finance set-up, it is essential that you have a proper car insurance policy to ensure that everyone and every vehicle is adequately protected.
To help you out, here are five mistakes to avoid when choosing comprehensive business car insurance.
1. Only considering the cost of a policy
The biggest mistake that people make when choosing comprehensive business car insurance is solely focusing on the cost of a policy. Buying the most expensive plan doesn’t necessarily mean you have purchased the best one for you, and obtaining the cheapest policy merely to cover the bare minimum isn’t a beneficial strategy, either.
Instead of only focusing on the price, you want to make sure that you are shopping based on both cost and coverage to guarantee that you are sufficiently protected. Whatever plan you opt for, you want to know that you have enough coverage so that you won’t have to deal with sky-high deductibles and other issues should something transpire.
Speaking of deductibles, you want to spend some time choosing the deductibles to ensure that you don’t have the wrong ones. Usually, the number of deductibles you have will depend on the policy you have.
Frequently, the deductible amounts you have will be undeviatingly linked to the price of the premium you are financing. In other words, choosing a high deductible can reduce the cost of the premium you pay, though it could have the opposite effect should you get into an accident as you will have to meet the entire deductible amount instantly.
Make sure that you inquire about accident forgiveness. Many insurance companies will offer accident forgiveness (if you ask), which means that your first accident will not raise your charge.
That being said, when you are speaking with insurance companies about your potential policy, make sure that you are inquiring about all of the discounts that you may qualify for. For example, if your record has you accident-free or you have an anti-theft device installed on the car, then you may be eligible for a discount.
Plus, there are often special prices for those who are purchasing comprehensive business car insurance.
Whatever your situation, before you commit to paying any price, make sure to ask the insurance company for a comprehensive list of discounts so that you are assured that you are getting the best price.
2. Not investing the time to speak with a variety of insurance companies
Not all insurance agencies are made the same and not all of them offer similar policies. For this reason, it is essential that you spend some time shopping around and speaking with insurance companies to ensure that you are getting a car insurance deal that is right for you and your company.
Even if you have been with the same insurance company for years, you should still evaluate your auto policy each year and compare what you are getting with other offers that are out there. Don’t fall into the trap of merely automatically renewing your plan every year without seeing if there is something better out there.
Whether you are looking for the best car loans for a personal-use vehicle or the best comprehensive business car insurance, generally, obtaining around four quotes is the best way to make sure you are acquiring the appropriate coverage at the best price.
3. Not having your finances in order
Getting the best comprehensive business car insurance also requires you to have your finances in order. You may find the perfect policy at a fantastic price, but if you haven’t prepared yourself appropriately, then you may not be able to qualify for it.
The most important aspect of your finances that you need to have in order is your credit rating. Usually, car insurance companies will use your credit rating as part of the preparation for your personalized quote. Therefore, if you are considering shopping for auto insurance soon, then ensure you are preserving your credit rating.
4. Hiding the truth from the car insurance company
Too many drivers think that it is a good idea to lie to the car insurance company in order to get a better deal. Under no scenario is this a good idea; in fact, it is a terrible mistake to make and something that can get you in a lot of trouble with both the car insurance company and your company.
By lying to the car insurance company about who is driving the car, what the vehicle is used for and where it goes and where it is parked, you are setting yourself up to get a policy that isn’t suitable for the reality of your life.
When it comes to drivers, always be entirely frank and truthful concerning who and how many people will be driving the vehicle on your policy. If you allow unreported drivers to get behind the wheel and the insurance company finds out, then you will find yourself, at the very least, paying a lot more money (although it is more likely that you will be dropped from the policy altogether).
Additionally, when the insurance company asks you to disclose any previous claims you’ve had, always communicate them all. If you opt not to reveal all prior claims and they are discovered down the road, your rate will also be bumped up, or you will find yourself without a policy at all.
Always share accurate information with your insurance company and update them when anything changes.
5. Understand the policy
As with everything in business, you want to make sure that you understand the policy that you are choosing for your business car insurance. Take the time to become thoroughly familiar with your plan so that you aren’t caught by surprise when you assume that things are covered, and they are not.
If you have other employees who are connected to your comprehensive business car insurance, make sure that they too understand the policy and provide them with a written-down and detailed breakdown of the coverage. That way, everyone can be on the same page. This will also help sort out disputes should they arise.
Have you recently purchased comprehensive business car insurance? Are you in the market for it? What are you finding challenging about deciding? Let us know in the comments below!
Rob Chaloner is the Founder and Managing Director of Stratton, and is passionate about smarter ways to buy and finance cars. With Stratton, he’s working to help Australian buyers disrupt the traditional car buying, financing and insurance markets through smarter products and online services.