Friday, December 7, 2012

Auto Insurance Myths You Should Know About


Myth 1:

While this is not dangerous, it does stop some people from getting the car the really want. The myth is about the color of your car. There are those who believe that having a red car will drive up their insurance rates. This is simply not true. While red is a color associated with fast and sporty cars, insurance companies are much more interested in the cars make and model, as well as the engine size and the body style. The fact that the car is red is moot when it comes to your rates.

Myth 2:

If you drive an older model vehicle, you do not have to worry about having coverage for theft. This is a myth as well. Many people think that their older model car would never be a target for a car thief. However, statistics show that car jackers prefer older cars because they are easier targets than the newer models that likely have some type of alarm system and are harder to break into. No matter how old your car is, you want to be covered in the event that it is stolen.

Myth 3:

Some people truly believe that their auto insurance company can cancel their policy any time they want to. This is not true at all. Unless there is a valid reason for cancellation, no auto insurance company can legally cancel your insurance, and especially not without fair and proper warning beforehand. And why would they want to? Insurance companies thrive because of the business their customers give them and do not like losing people.

Myth 4:

I let my friend borrow my car and she caused an accident. Since she was driving, her insurance company is responsible for any damages. This is perhaps the biggest auto insurance myth there is. The reality is that the insurance company is following the activity of your car, not the one who is driving it. It if is your car and the policy is in your name, your friend is not the responsible party - you are. When all is said and done, you can turn around and sue your friend's insurance company for the damages you had to pay for, but that is a whole separate issue.

Myth 5:

No fault insurance has been a topic of much confusion for the unknowing driver. While some think that it means that an accident will not be marked as their fault even if it is, this is obviously not the way it works. No fault insurance simply means that you, and any others involved in an accident that you caused, are covered for any expenses that are immediately needed. This includes medical attention and car rentals. Other than that, the insurance companies will fight it out to see who is responsible for paying what.

Some auto insurance myths are common sense, but when in doubt run your questions by your insurance agent so there is no confusion later.

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