We have compiled a list of the top 10 most misunderstood facts about car insurance after many years working in the industry. These myths about car insurance are the most frequently asked questions by people when they want to buy or review their car insurance coverage. It’s better to know now than waiting until it’s too late.
- Just got my first speeding ticket, my insurance rates will go way up.
Reality – If this is your first ticket, your rates won’t likely change. Direct car insurance companies will usually grant you a pass if there have been no claims or tickets in the last 3 to 5 years, depending on which company.
- The new Plasma TV that I purchased last year will not affect my Car Insurance
Reality: It could happen if you don’t pay your credit card bill. Nearly all insurance companies use credit scoring to determine if you are eligible for insurance and what your rates will be. Rates can vary by as much as 50% between someone with good credit and someone with bad credit.
- I have just crashed my car into my lawnmower, it was parked in my garage. My homeowners policy will cover it
Reality: Your homeowner’s insurance has nothing to do about covering your car. Only Comprehensive (Compl) coverage will cover your car. After you have paid your deductible, you will be covered.
- I laughed at my friend’s car and told him to relax, my insurance will pay
Reality:It may, but only after your friend’s policy pays first. Let’s say that your friend has $500 collision deductible, and you have $250. Your friend would need to pay $500 for his deductible, as his insurance company will be Primary. Your insurance will not pay your friend’s policy limits until your insurance pays. Remember that your deductible doesn’t matter in this situation. It will be determined by your friends.
- Your car insurance will not cover you if you ride your bike and are hit by a vehicle
Reality: You may be surprised to find that your car insurance policy covers you if you are injured or killed riding your bike, or walking down the street. Your Uninsured/Underinsured coverage would cover you if the driver of the car doesn’t have insurance or isn’t enough to cover your injuries.
- My car was broken into by someone who stole all my personal items. My car insurance will cover it.
The truth: Car insurance does not cover personal items left in the vehicle. To be compensated for these items, you will need to file a claim with either your Renters or Homeowners insurance policies. Your car insurance will not pay for any items attached to your vehicle.
- My Car Insurance will be more expensive because my car is red-colored, black-colored, or pink.
Reality The color of your car does not affect your rates. You can choose a red or black car if you prefer it. This silly nonsense should not stop you from purchasing a car.
- Since I haven’t owned a car in the past 2 years, my rates won’t be affected.
Reality: Most direct car insurance companies today frown upon the idea of you not having continuous car insurance. Some companies will not penalize you for having no prior insurance. You don’t need to have any prior insurance if you aren’t eligible. Oh, and I can’t afford my insurance isn’t on that list.
- If I have to make a claim, telling a little white lie in my insurance application will not affect my coverage.
Reality:This can be one of the most dangerous things that a person could do. There is a high chance that you won’t get coverage if you lie about your insurance application. They think they won’t discover? These are two things to remember when an insurance company is on the hook and owing you a lot of money. #1 They will start asking questions, and they will first look at your application. You wouldn’t mind if they were you? Reason #2: The insurance companies have more wealth than God and have full-time employees who work to find out this stuff.
- It will cost less to insure a car that is more affordable.
Reality: While there are many factors that insurance companies consider when determining rates, the most common is the fact that the higher-priced car will be charged more than the lower-priced one. The cost of replacement parts is one of the major factors that affect the Comp & Collision coverage. Sometimes, replacement parts can be expensive for less-expensive cars and more exotic cars.
Remember to look at all your options when you go online searching for insurance policies that are cheaper. There are hundreds of direct auto insurance companies looking to get into your pocket. Just make sure you have the ability to access theirs when it comes.
