Auto Insurance Myths that Will Cost You
Knowing car insurance myths can help you avoid costly mistakes, especially in areas in which practical evidence and industry reports point to the need of structural and mechanical changes in your automobile.
Below are some of the most common car insurance myths that can prove costly for those who believe them. As always, be sure to do your research into your vehicle and the driving laws of your state so you know what you’re dealing with.
1. My Red Car Will Cost Me Dearly If I Want to Insure It
Forget about the color of a car affecting premium rates. Whether you have a red car – or a blue or yellow one, for that matter – will not increase or decrease your monthly premium remittance.
Your insurance company cares more about things like body style, engine size, year, and model than the cosmetics of your automobile. What also matters to your insurer is your behavior at the wheel, tickets you could potentially rake in, and moving violations like reckless driving and speeding.
2. My Credit History and Score Have Nothing to Do with My Insurance Rates
That is inaccurate. Your insurance company is very interested in your financial situation because premiums typically don’t pay themselves off. You need a job and sufficient income to afford premium payments, so things like employment history, income level, and net worth are important to your insurer.
Additionally, your credit score and overall creditworthiness play an important role in the way the insurer evaluates your risk profile, that is, to ascertain whether you are a high-, medium- or low-risk potential client.
3. I’m Covered If Anything Happens to My Car
Don’t believe that. Unless you have comprehensive and collision coverage, you are on your own if your automobile is damaged by flood, hail or fire, or if vandals, say, on a Friday night spray-paint graffiti on your windshield.
Reducing risks of damage to an automobile is one of the reasons why a lender or car leasing company would require that you add comprehensive and collision riders to your insurance policy before driving the car.
4. My Car Insurance Policy Covers Rentals, Too
Your car insurance policy typically does not cover rentals, especially if you lease the automobile overseas. But talk to your insurer to get more information about coverage transferability because some insurance companies grant that coverage.
Usually, the rental agency would recommend that you insure the car for a small daily amount to be added to your rental quote, and I think this is a smart thing to do, especially if you are in foreign land and the road conditions and local driving patterns are dissimilar to what you are familiar with in the U.S.
This has nothing to do with your driving ability; it pertains more to the increased risk level and the difference in infrastructure and driving habits that you could experience overseas.
5. I’m Not Responsible if Someone Drives My Car – And Damages It
Not true – and I might even add, nonsensical. The car is yours, so anything that happens to it is your responsibility, irrespective of who was at the wheel when the incident occurred.
You can go back and sue the person responsible for the incident, but initially, you would have to bear the responsibility when talking to your insurer. Note that your insurance company follows the car, not the person operating it.
6. Everything in My Car is Covered – Including Personal Belongings
Your insurance company does not cover personal property you leave in your car, so think twice before you leave your latest iPhone or brand-name fur coat in the automobile. If personal items get stolen or damaged in the course of an incident, you are out of luck.
Now that you understand the various policies that are out there, you should make a decision on what the coverage amount you need. So, decide which policy types you need, that is, one that will give you peace of mind while you are on the road so you are comfortable should the worst happen.