Top 10 Auto Insurance Myths

Myths can be dangerous things, especially when it comes to automobile insurance. When choosing your automobile policy, it’s important to know where reality ends and myths begin. This knowledge can help you save money on premiums and become a safer driver at the same time!

1. I Don’t Need Automobile Insurance Because I’ve Never Had an Accident

Every state legally requires every driver to have some variation of car insurance. If you are fortunate enough to never have had an accident, then you may be eligible for a safe driver discount. However, you still need to protect yourself and others with the proper automobile insurance.

2. My Bad Credit Doesn’t Affect My Insurance Rate

Now more than ever, insurance providers perform credit checks on applicants before underwriting a policy. If you have poor credit, there is a very good chance that you will be paying higher premiums than someone with good credit.

3. Owning a Red Car Will Increase My Policy Premiums

The color of your vehicle makes no impact on your policy rates. The vehicle’s make, model, year and engine size do affect premiums. Your credit score and driving history play into your rate as well.

4. I Have No-Fault Insurance, So I’m Not at Fault for an Accident

If you cause an accident, you are still at fault. No-fault insurance just means that your insurance company will pay for your damages regardless if it’s a result of your actions or another driver’s.

5. I Don’t Need Additional Insurance to Use My Personal Vehicle for Business Purposes

This is a tricky one. Many insurance companies will only cover your vehicle for personal use on a personal policy. If you are transporting clients or using the vehicle for business purposes, you should contact your insurance company to see if you need any business-use extensions added to your policy.

6. Comprehensive and Collision Coverage Are One and the Same

These are two different types of coverage. Collision coverage will only protect you against collision. If you want additional protection against theft, vandalism, weather-related damage or damage from a collision with a deer, then you should opt to include comprehensive coverage in addition to collision coverage on your automobile insurance policy.

7. My Driving Record Doesn’t Matter

Even though you’ll need auto insurance whether you’ve had an accident or not, the fact is you can save considerable money on premiums if you keep your driving record clean. Auto insurance companies fight to sell policies to people who are unlikely to make claims, so keep that record clean and check in with your company periodically about discounts and rate adjustments.

8. If Someone Not Named in the Policy is in an Accident Driving My Car, I Am not Liable

This is absolutely not true. If the accident is in your car, it is your responsibility, and you shouldn’t be surprised if your premiums go up as a result.

9. The Government Decides My Premiums

While each state sets rate regulations, your individual premiums will vary with your specific situation and which company you choose to insure with, so consider your options carefully.

10. If I Buy a New Car it is Automatically Covered Under My Existing Policy

Not true. You may receive temporary coverage if you drive the car off the lot and into a pole, but for long term coverage, you must inform the insurance company of the new vehicle and provide all necessary information.

Myths Summarized:

• I have a perfect driving record and therefore do not need car insurance.
• My credit score does not affect my insurance premiums.
• If I own a red car, I have to pay more for car insurance.
• I have no-fault insurance, so I’m not at fault for an accident.
• My insurance will protect me for business purposes.
• Comprehensive and collision coverage are the same thing.
• My driving record does not matter.
• If someone not named in the policy is in an accident driving my car, I am not liable
• The government decides my premiums
• If I buy a new car it is automatically covered under my existing policy

– Posted in:

Auto Insurance

– Tags:

– Bookmark:

Digg del.icio.us Reddit StumbleUpon