The Most Common Car Insurance Myths Debunked
By: Good2GoPublished: July 14, 2014
Separating fact from fiction is no easy task, especially when it comes to figuring out how much you’ll pay for car insurance. To help you better understand what’s true and what’s just plain false in terms of your policy and your rates, we are debunking the most common car insurance myths.
Myth: The color of my car can increase my insurance rates.
Most drivers assume that if their vehicle is a certain color – namely red – then insurance carriers will increase their rates. Nothing could be further from the truth. Your car could have stripes, polka dots or be leopard print and your premium wouldn’t change a cent. Car insurance companies are mainly interested in the year, make, model, body type, engine size and age of your vehicle. The color of your car may reflect your personality, but it doesn’t reflect the price you’ll pay for car insurance.
Myth: Car thieves are more likely to steal newer cars.
Wrong again. On the contrary,statistics show that thieves prefer to steal older cars because they are easier to steal and are often stolen for their parts. Because drivers are keeping their cars longer due to the economy, the market for older car parts is growing. According to the 2012 National Insurance Crime Bureau (NICB) report, the top 10 most-stolen vehicles reported were: Honda Accord ’96, Honda Civic ’98, Ford pickup ’06, Chevrolet pickup ’99, Toyota Camry ’91, Dodge Caravan ’00, Dodge pickup ’04, Acura Integra ’94, Nissan Altima ’97, and Nissan Maxima ’96.
If you own an older vehicle, and have opted out of comprehensive car insurance coverage, your car will not be covered if it is stolen.
Myth: Personal property inside my car is covered by my car insurance.
We hate to break it to you, but if items in your vehicle are lost, stolen or damaged, your car insurance will not cover the losses. Your best bet is to file a claim through your homeowner’s or renter’s insurance to help recover your property.
Myth: My insurance will cover me if my car is vandalized or damaged from natural disasters or fire.
Call it wishful thinking, but you’re car insurance does not cover damages caused by vandalism, hail, flood or fire unless you have comprehensive coverage. Comprehensive coverage pays only for damage caused by events other than a collision. While you may have minimum liability coverage, you may want to strongly consider adding on comprehensive coverage if you want to be reimbursed for the above situations.
Myth: Full coverage auto insurance includes rental and towing costs.
While full coverage car insurance covers more than just the basics of liability coverage, it does not include rental or towing costs if your car is completely out of commission. Due to this, you may have to pay these rental and towing costs out-of-pocket.
Myth: My insurance company can cancel my policy whenever they want without my knowledge
Now that’s just mean. Car insurance companies cannot cancel your coverage willy-nilly if you’re in the middle of a term, especially if you’ve been paying your premiums on time. However, your policy may be canceled if you do not renew your policy, if you commit insurance fraud, or for non-payment of premiums.
Myth: Cheaper cars cost less to insure.
Not necessarily. If you own a cheap car that is an unusual model, has a large engine, or weighs a lot, it might cost more to insure than a smaller, more expensive car. Again, make and model weigh heavily against how high or low your insurance rates will be. The driver of the vehicle also plays a part in determining insurance costs as high risk drivers who have a less than stellar driving record will pay the price of higher premiums – literally.
Myth: Older drivers pay more for car insurance.
Now see here you whipper-snapper, car insurance rates can actually decrease with age. In fact, many drivers who are 55 or older can get their rates reduced if they complete an accident prevention course. These courses are available through local and state agencies as well as through the AARP. Successfully completing these courses prove to your insurer that you are willing to go the extra mile to be a safe driver. Check with your insurance carrier to find out about defensive driving discounts. Keep in mind that requirements for this type of discount may vary by state and insurance carrier.
Myth: My credit score doesn’t affect my car insurance rate.
After your driving record, your credit score is the biggest factor in determining your car insurance rate. Your credit history gives your insurance company a look into your financial habits as well as the likelihood of an insurance claim being filed in the future. If you have a lot of loans, credit card debt and unpaid bills, this may hurt your chances at getting a decent rate. While most U.S. auto insurance companies use credit-based insurance scores, California, Hawaii and Massachusetts have banned this practice.
If you’re in the market for auto insurance, save yourself the headaches and heartburn of figuring out all of the car insurance myths that are floating around out there with these facts, brought to you by Good2Go.
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