Top 10 Auto Insurance Delusions

Every day you hear such statements: “The credit score does not affect insurance premium” “The color of a car influences auto insurance rate”, “I already have auto insurance coverage so if I buy another car, it will be automatically covered”. Are these allegations right? Of course not! We provide you with the list of myths, which are believed and followed by car owners every day. We hope that the truth will change your course.

Myth #1: "I don't need auto insurance, because I've never had or been involved in a car accident."

False. Even if you are among such drivers who are lucky enough to avoid accidents, the car insurance is the best protection you can have in the event of auto accident. There are some forms of auto insurance that are required by law to be in a car at all times; in case of their absence you may be strictly penalized.

Myth #2: "Auto insurance for males under the age of 25 will cost more."

True, up to a point. Males under 25 years old usually pay more for car insurance as compared with female drivers under 25. However, applying to all, teenagers and seniors are such age groups which are typically involved in more automobile accidents – that is why they pay more for auto insurance.

Myth #3: "My insurance rate is not affected by my credit score."

False. Your credit score really matters. A lot of Insurance companies take your credit score into account when you want to purchase, change, or renew your auto insurance coverage.

Myth #4: "The government sets insurance rates."

False. The government does not set any car insurance rate. Only car insurance companies are allowed to set the rates and the state's insurance department only regulates them. Your premium is actually affected by such things as your place of living, your credit score, your marital status and your driving record.

Myth #5: "Personal and business use of the car is covered by your personal auto insurance."

Be careful. It can cover it, but you need to check it with your car insurance company. If sometimes you use your personal car for business purposes (transporting clients, going to and from meetings or hauling business equipment), then extending your personal car insurance to cover your business use is really for you. Plus, in case you have employees who use their cars while working for you; it is better to obtain a separate non-owned car insurance policy.

Myth #6: "The no-fault insurance type implies that I’m not guilty in the accident"

False. Usually no-fault insurance implies that your insurance company makes payments for the damages regardless of which person is guilty.

Myth #7: "Such thing as the color of my car determines my insurance rate."

False. The color of your car does not influence your car insurance rates. Your rate depends on your vehicle's year, make, model, body type, engine size, as well as your credit history and driving record.

Myth #8: "In any case, I'm still covered for such risks as theft, windstorms, hail and deer accidents, even if I have no comprehensive coverage."

False. Many drivers believe that if they purchase only collision insurance — which covers damage to their car resulting from driving accidents — that they will be covered for incidents caused by vandalism, hail, animal accidents and fires as well. It is not true. If you want to protect your vehicle from all of these situations fully, you need to purchase both collision and comprehensive coverage.

Myth #9: "If my friend or a girlfriend uses my car under my permission and gets into an accident, his or her insurance will be used to pay for the damages."

False. The responsibilities lay on the owner. Moreover, even if you weren't present at the time of the accident, it will go on your insurance record and will cause the growth of your insurance premium. Sometimes in the event when the damages exceed your policy's limits, your friend's insurance could act as excess insurance.

Myth #10: "A few months ago I have already paid my insurance premium, so there is no need for an additional coverage for my newly purchased vehicle."

True, but partially. Almost all insurance policies require the policyholder to notify car insurance company or an agent within a specified number of days after the purchase was made.

If you have any questions or comments, please let us know.

Get an Auto Quote!

Quote in three easy steps • Extensive help menu • Quote online. Buy online