Buying car insurance can sometimes be akin to going to the dentist – painful but necessary. In the case of insurance, complicated and expensive.
No one really knows how premium costs are determined, and when you ask an agent, he usually “Hems and has,” or gives you long complicated explanations you can’t understand. That could very well be the reason why there are so many myths related to insurance coverage and pricing. The following are five common auto insurance misconceptions you should know about.
Misconception-1:The Color of the Car Influences the Price of Your Auto Insurance Policy
Many people believe that the color of a vehicle is the deciding factor in a car insurance premium. In fact, those that believe the myth say the more vibrant a color your car is, for example, red, the higher your insurance will be. In truth, the color of your car does not influence the cost of your insurance premium. However, your auto insurance premium is influenced by the make, model, body type, engine and vehicle age. When buying a new car some good questions to ask yourself are: is it popular with thieves? Is it expensive to repair? And does it have an excellent safety record? If you don’t know the answer to these questions, you should look them up as they will influence the cost of your insurance.
Misconception-2:The Older You Are the More You Pay for Insurance
It may be true that life insurance rates go up when you get older, but that doesn’t hold true for car insurance. To the contrary, drivers who are 55 or older can often get their rates reduced by as much as 10% – especially if they complete an accident prevention course.
Misconception-3: Your Car Insurance Policy Covers Any Damage to Your Car
This is a half-truth. It really depends on the type of insurance you have. If, for instance, you only have liability insurance, which only offers you coverage if you hurt the other driver or damage his/her property. This type of insurance doesn’t offer coverage for your vehicle if you are at fault.
Comprehensive and collision insurance coverage, on the other hand, does offer you property protection and injury protection. However, this is only an optional coverage, unless your car loan or lease requires you to have it. Comprehensive insurance also offers you compensation for damage to your vehicle, including damage caused by something other than a collision with another vehicle. This might be damage as a result of fire, vandalism, weather, theft and other types of damage. Note: if your car is worth less than a couple of thousand dollars, this optional coverage may not be worth the price.
Misconception-4: Military Personnel Pay More for Car Insurance
This seems to be a very popular misconception, when, in fact, just the opposite is true. Military personnel, no matter what the branch, usually qualify for auto insurance discounts. Of course, you’ll have to document your military rank and the length of time of service.
In some cases, an insurance company will also offer former members of the military or a military family, discounts as well. So this is one question you should ask any car insurance provider.
Misconception-5: Your Policy Offers Coverage when You Drive the Car for Business
Your personal auto insurance coverage will not compensate you if you are self-employed and using your own car for business needs. For example, if you take on a pizza delivery job and use your own car, the company’s insurance policy does not cover you. Your personal insurance could also deny your claim. To compensate for this issue you should get business auto insurance, or refrain from using your personal vehicle for business needs.
Bottom Line
When it comes to car insurance, there are many influencing factors. The type of car you drive, your driving record, your age and even your credit score will influence the rate you get. However, none of the above misconceptions will affect your insurance rates either positively or negatively.
source: insurancequotesfast.com
