Getting the best auto insurance at the best price is a daunting task for many people. And, all the myths and misinformation out there does not make the job any easier
. Talking to a trusted insurance agent can help get the real facts about insurance coverage and payouts. Comparing quotes from several insurance companies with good customer ratings online can also be helpful.
It is important to communicate with your insurance agent to get all your questions about coverage answered and in writing on a policy.
8 Auto Insurance Myths
There are at least 8 auto insurance myths that can cause insurance customers loss of money and heartache when there is an accident.
- The color of your car affects the price of the auto policy. This is not true. The rates are determined by factors such as make, model, body type, age of the vehicle, engine size, cost of the car and repairs, your safety record, age and credit history of the driver, and the likelihood of theft.
- Older people are charged more for auto insurance. No, many companies have discounts for older, safe drivers. Also, there are discounts for older drivers who take an accident prevention course.
- The cost of car insurance is not affected by one’s credit history. This is wrong. People with higher credit scores and good credit history will often pay less for car insurance.
- Auto insurance automatically covers car owners whose cars are stolen, damaged by hail, flood, or fire, or vandalized. Only policies with comprehensive and collision coverage in addition to the standard policy have this coverage. Make sure the proposed insurance policy has these things covered–in writing.
- People only need the minimum insurance coverage required by law. This is usually only liability coverage and requires more out of pocket for losses from an accident. The average car owner needs a car insurance policy that covers their car damage and personal injury costs as well as liability.
- If you let another person drive a vehicle and they get in an accident, their insurance will cover damages. This is not true. In many states, the primary insurance on the vehicle will be the owner’s policy. So, the owner’s insurance will be responsible to pay the damages no matter who was driving. Exercise caution when letting other people drive.
- Auto insurance costs more for soldiers than for civilians. Actually, members of the armed forces are eligible for auto insurance discounts. The military personnel will need to provide documentation of rank, name, and date of service.
- The family auto insurance policy will cover a vehicle during business use. Not always so. At the time a person is purchasing auto insurance, they need to get business coverage added to the personal use policy.
Another common fear is that if a person is judged responsible for a car accident, their insurance company can drop them right away. The truth is that an insurance company must wait until the policy period is up.
This is still not pleasant, but there is time to find another insurance company if this might happen. It is always better to drive carefully, obeying all traffic laws so that fewer accidents happen.
Another problem with getting reasonable car insurance is speeding tickets, they follow the driver for longer than one would think and can cause rates to be higher.
Coverage Options For Car Insurance
When a person is getting insurance quotes, there are several coverage options to consider. They include bodily injury liability which most states require. It protects people injured by an accident you cause. You will also need to consider personal injury coverage for yourself and your passengers.
Then there is property damage liability insurance which covers damage your car may do to another car, home or personal property.
Along with covering the other party, you will want to have collision coverage so your car damage will be covered in case of an accident. Then add to that, comprehensive coverage in case the car is damaged in a non-accident event such as damage by wildlife, storms, and vandalism.
Other policy additions that are important to consider are replacement value coverage so, in case of the car needing to be replaced, the full amount rather than the depreciated value is paid.
Unfortunately, it is also a good idea to carry uninsured motorist coverage in case of an accident with the at-fault driver being uninsured or underinsured. This protects the innocent driver from having to pay for damages themselves.
How Car Insurance Rates Are Determined and Discounts You May Deserve
Lower insurance rates and discounts can be given drivers who have not had any car accidents or claims for three to five years. No moving car violations or tickets means lower rates also. No lapse in insurance coverage is also a good thing.
Whether it seems fair or not, insurance companies will use the car owner’s credit history to determine risk factors and insurance rates. Along with that, they will consider the driving history of tickets, accidents, and personal injury claims. The insurance company will consider where the car is parked and how many miles it is driven in a year and where the driver lives and works.
Other factors such as driver education and safety classes, anti-theft devices, and owning one’s own car and home can mean lower car insurance premiums. Some things such as vehicle safety ratings also affect insurance rates. When a family is car shopping, they may want to consider insurance rates as well as other attributes for each car they are considering.
Knowing the facts about car insurance coverage and policy cost factors can lead to lower rates with better coverage. But, it is important to talk to a trusted insurance agent and get all coverage commitments in writing.
Every time a person trades in a car for another model, insurance coverage must be changed. If a person moves, the insurance agent must be informed and it might affect premium rates.
Don’t forget to talk to the insurance agent upon retirement or any factor that causes fewer miles to be driven.
Have you ever heard any of these auto insurance myths?