Auto Insurance Myths – Lets Face Reality

There are people who believe certain stories related to car insurance which hamper their decision making when it comes to selecting the right auto insurance. Some of these are mentioned below so that if you have heard of any such story, stop worrying and discard it as a myth.

• Some people believe that if they have never had a car accident they do not need an automobile insurance. However this is a myth as accidents happen without warnings and not having insurance in such cases can involve legal issues and penalties.
• Many believe that the personal auto insurance covers the business use of the car as well. This is all right as far as you use the car yourself and for limited purposes. However, where the car is being used by employees or drivers then auto insurance is a must.
• ‘No fault’ insurance does not mean that it is not your fault. It implies that the insurance company pays for the accident irrespective of whose fault it is.
• The color of the car has no effect on the insurance rate. The factors that affect the insurance rate include engine size, make, model, year of purchase and your driving history.
• If you have insured you car and your friend has an accident while driving it, the insurance company is still liable to pay and not the insurance company of your friend.
• Many believe that the insurance rate is set by the government. This is false, as the insurance rate is set by reasons such as marital status, driving record, credit score, where you live and age.
• Some feel that if they have recently paid insurance premium then the new car purchased by them is automatically covered. This is not true as you have to notify the insurance company or agent about the new purchase of policy within a specific number of days.
• Males less than 25 years of age have to pay more auto insurance is a myth. However, in most cases teenagers and senior drivers have to pay more as the risk associated with accidents in their case is more.
• Some feel that their credit score does not affect their auto insurance rate. However, it does! Many companies take this fact into consideration while renewing an insurance coverage.
• Many people feel that their vehicle is insured against windstorms, theft and hail even if they do not have a comprehensive coverage, however, this is not true.