Car insurance is one of those necessary expenses that can quietly get more expensive every year—often without you realizing why. From minor missteps to overlooked details, certain behaviors can send your premium skyrocketing. Whether you’re in the U.S. or Europe, here are the top 7 common mistakes that raise your car insurance costs—and how to avoid them.
- Letting Your Coverage Lapse
Even a short break in coverage—like going uninsured for a few weeks—can label you as a high-risk driver. Insurers reward continuous coverage with lower rates.
Avoid it: Set up automatic renewals or shop for a new policy before your current one expires.
- Not Updating Your Address
Where you live affects your risk profile. Moving from a rural area to a city can raise your rates—but not updating your insurer can also void claims or cause back-billing.
Avoid it: Always notify your insurer of any move, even temporary ones (especially relevant in Europe, where cross-border moves are common).
- Using the Wrong Annual Mileage Estimate
Underestimating your mileage might save a few dollars up front—but insurers can deny claims or increase your renewal rates if your odometer tells a different story.
Avoid it: Be honest about how much you drive and update it annually if your routine changes (e.g., remote work, new job).
- Not Bundling Your Policies
Failing to bundle auto insurance with your home, renter’s, or life insurance could mean missing out on multi-policy discounts—as much as 15–30% in some regions.
Avoid it: Ask your insurer if bundling options are available, or compare multi-policy quotes from competitors.
- Ignoring Your Credit Score (US only)
In the U.S., your credit-based insurance score heavily affects your premium—even if you’ve never had an accident.
Avoid it: Monitor your credit report, pay bills on time, and dispute errors. (Note: This does not apply in most European countries due to stricter data privacy laws.)
- Filing Too Many Small Claims
Every claim you make gets recorded. Even if your insurer pays out $100 for a cracked windshield, multiple small claims can make you look risky.
Avoid it: Pay out-of-pocket for minor repairs to keep your claims record clean.
- Choosing the Cheapest Policy Without Checking Coverage
That rock-bottom quote might come with high deductibles, limited coverage, or poor customer service. When a serious accident happens, the short-term savings can turn into long-term regret.
Avoid it: Compare quotes based on coverage and claim satisfaction, not just price.
Bonus Tip (Europe Focused): Not Taking Advantage of “No-Claim Bonus” Systems
Most European insurers offer No Claim Discounts (NCD) that grow every year you don’t file a claim—sometimes reducing premiums by up to 70%.
Avoid it: Always ask if your policy includes NCD and whether it’s portable if you switch insurers.
Final Thoughts
Insurance companies reward smart, low-risk drivers—and penalize carelessness. Avoiding these mistakes can save you hundreds annually and protect you when you need it most. Take 30 minutes to review your policy, update your information, and explore your discount options. Your wallet will thank you.
