Auto Insurance Myths

Sometimes, there are things people tend to believe to be true but are actually not. Those are myths. There are myths for everything: food, menstruation, and yes, even auto insurance. Here are the 10 most common auto insurance myths.

10. No-fault means it's not your fault
Not true. This simply means your insurer pays for your damages no matter whose fault it is.

9. The car color affects the insurance rate
Absolutely not! However, the make, model, engine size, year, body type, and driving record do.

8. If someone else got my car in an accident, his/her insurance company should handle it and not mine
False. It's your car, so it's your responsibility. Even if you weren't there at the time of the accident, you can still receive a mark on your record which can increase your insurance premium.

7. Insurance rate is set by the government.
In almost all cases, no. What do though are where you live, credit score, marital status, and driving record.

6. The premium paid for the other day covers the car purchased today
No it doesn't. Not in all cases at least. Most insurance policies require the holder to notify the company if there is a wish for the new car to be covered as well.

5. Males below 25 years of age pay more for auto insurance
It's a split. Males MIGHT pay more because they tend to drive more than women in most cases, but for both genders teenagers and mature adults pay more for auto insurance. This is because they're most likely to get in accidents.

4. Credit scores do not affect auto insurance rates.
False. See #7, many insurance companies take this into consideration.

3. Cars are covered for natural disasters and other events beyond my control even though there's no comprehensive coverage
Not true. Just because you're covered for collisions, doesn't mean you're covered for everything. Vandalism, theft, fires, and animal accidents aer a few examples of what isn't covered by collision coverage. For best results you have to purchase both comprehensive and collision coverage for your insurance policy.

2. Personal auto insurance covers both personal and business use of the car.
Personal auto insurance is for personal use. If you wish to use your car for business as well, you will need to extend your policy to cover this.

1. People who never get into accidents don't need car insurance
Absolutely not true! Even if you're the luckiest person on earth, you're still not sure when someone is going to get mad at you for that and wreck your car out of frustration and envy. Furthermore, you are required by law to have at least basic auto insurance. There are punishments for not doing so.