However, this is certainly not the case because each car insurance scheme is different in its own way. Most common mistake that the individuals make while buying car insurance is not looking around for better options and comparing the insurance policies from different marketers.

First of all, it is important to understand different types of auto insurance policies. You can choose the policy based on your preferences.

Third-party liability only policy :- A mandatory policy as per the Motor Act of 1988 that has to be taken with the purchase of an automobile.

Comprehensive coverage policy :- Coverage against own-damages, total loss of or damages to your vehicle caused by theft, accident, explosion, fire, lightning, self-ignition, strikes, riots, natural calamities or act of terrorism.

Know your coverage types – Before heading further, it is important to know what your car insurance policy actually covers? Although even if you are buying a single insurance policy covering a specific vehicle, several factors contribute make up the final cost such as bodily injury liability, property damage liability, medical payments, uninsured motorist protection, and collision coverage.

Your vehicle type – Whether you have a SUV or a luxurious car, insurance premiums are partly based on the cost of the vehicle. Several factors are considered before finalizing the premium amount such as how much will it cost to repair a vehicle (including repair parts cost and labour charges).

Know who you are – Yes, you read it right. You need to know yourself before buying auto insurance. Customer’s age, gender, and driving history are key factors that have an effect on the insurance premium. For instance, unmarried males under 25 years have to pay higher premium because the statistics show that the young men are more prone to road accidents.

Decide your coverage preferences – While it is dangerous to be underinsured, it is equally expensive to go over-budget for an insurance policy. While not getting the property insured is a risky game, the minimum amount of insurance required is seldom enough.

Reduce your premium – Most companies give a premium discount to those who drive less than 7500 miles annually. Before finalizing the purchase decision, ask your insurance agent about the total cost of insuring the vehicle. Also, drive safely and avoid accidents and traffic violations as insurance companies reward such customers with insurance premium discounts.