AUTO INSURANCE ARTICLE
Auto Insurance Myths We Should Forget About
By: james_writerOftentimes, our ignorance gets the best of us. In the case of auto insurance, there are a lot of myths we live by and if we could bust them we could be in for a lot of savings. Here are the top five auto insurance myths we should forget about.
“I don’t need auto insurance because I have never been in an accident my entire life.”
This is entirely false. You may be the most careful, luckiest driver in the world and thus you have never had any accidents in the past. However, not all drivers are as careful as you are and having auto insurance may be the best protection you can have in the unlikely event of an accident. Besides, having auto insurance is mandatory in most states so you need to purchase one to avoid huge penalties.
“My auto insurance premiums are not affected by my credit rating.”
Well, this used to be true but auto insurance companies are now looking at drivers’ credit history. Car insurance companies are not likely to renew your policy if you have very poor credit rating so start paying your bills on time. A good credit rating shows your capacity to pay your monthly premiums and it also shows how responsible you are. The better your credit score, the less risk you are for auto insurance companies and therefore you will get relatively cheaper auto insurance rates than those who have poor creidit.
“My auto insurance rate is set by the government.”
Let’s get this straight—the government doesn’t set our auto insurance rates at all. The government regulates the rates that the car insurance companies are allowed to offer but they don’t dictate the price. Instead, auto insurance companies considers a number of factors to determine your auto insurance rate such as your driving record, age, gender, credit history, car make and model.
“I will pay for expensive car insurance if my car is colored red.”
The color of your car does not affect your auto insurance rate at all. What auto insurance companies consider about your car instead is the model of your car, make, engine size, body type, and its safety features. If your car is a red Ferrari then you will be paying higher premiums not because of its red color, but because of the model and make.
“A friend who borrowed my car was in an accident but his / her insurance company will cover the damages.”
Of course not. Your friend’s insurance could only cover excess insurance if the damages exceed the limit of your current policy. You lose in this situation whichever way you look at it—even if you were not there during the accident, it will appear on your insurance record and this may even cause your car insurance premiums to increase. Therefore, make sure you only lend your car when it’s an emergency situation and only to people included in your policy. Otherwise, you’ll end up paying for your friend’s bad driving.