There are a lot of myths we believe when it comes to Auto Insurance and if we could bust them we could save a lot of money. The following are the top five auto insurance myths we should should watch out for.
“I have never been in an accident my entire life. Thus, I do not need auto insurance.”
False. You may be the luckiest driver in the world because you never had any accidents in the past. But keep in mind that not all drivers are as careful as you are. That's why having car insurance will be the best protection you can have in case you encounter an accident. Auto insurance is mandatory in most states anyway so you need to get one to avoid penalties.
“My auto insurance premiums are not affected by my credit rating.”
False. Auto insurance companies are now looking at your credit history. Car insurance companies will not renew your policy if you have very poor credit rating. The better your credit score the cheaper your auto insurance rates will be.
“My auto insurance rate is set by the government.”
The government doesn’t set our auto insurance rates at all. They regulate the rates but they don’t directly dictate the price. Auto insurance companies consider 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.
“A friend who borrowed my car was in an accident but his / her insurance company will cover the damages.”
False. 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.
