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Ten Auto Insurance Myths Debunked

We have all heard some old wives’ tales. How to pop your knuckles and how to do it will give you arthritis. By the way, it has absolutely no basis in reality, so go ahead and take heart. Old wives’ tales, myths, and urban legends – call them what you want – usually appear about things that are important to us but that we simply cannot fully understand. Since car insurance is mandatory in our country, it affects our wallets a lot every month, and it is actually a very complex and confusing topic, it is no wonder there are so few myths about car insurance. Today we will reveal 10 of the most common and misleading myths about auto insurance.

Myth 1: I will save money by choosing the cheapest price available.

Truth: When you buy auto insurance, you buy peace of mind and know that an accident won’t mean the end of your savings and debt for life. However, to ensure that you will be covered for any loss or damage, it is best to choose car insurance quotes from a company with a good reputation for maintenance and payment methods when making a claim. Choosing a mysterious, moving night insurance company just because they offer you the cheapest rate is a bad idea. If her claim is rejected, or if she does not have the funds to pay it, she is likely to lose a fortune.

Myth 2: All I need is minimal responsibility.

Fact: yes and no. Minimum liability is all you need to drive legally. However, it’s definitely not all you need if you want to be covered in the event of an accident. Minimum liability is the minimum amount of vehicle insurance you must purchase to legally drive, and the amount varies from state to state. But there are many accident scenarios that are not covered by the minimum liability. Liability only covers damage caused by your vehicle to third parties. It does not cover damage or theft of your vehicle. At a minimum, comprehensive coverage and collision coverage are recommended in addition to liability.

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Myth 3: Red car insurance costs more.

Fact: No, the color of your car does not affect your insurance rates. The make, model and condition of your vehicle affect your insurance rates, but the color does not.

Myth 4: Old, rusty cars are cheaper in terms of insurance.

Fact: An old, dilapidated car will cost more to maintain, need more frequent repairs, and have fewer safety features. This makes it riskier for insurance companies and as such they generally charge higher premiums for these cars. Used cars that are only 2 years old and in good condition tend to have the best auto insurance rates.

Myth 5: My insurance company can cancel my policy at any time and for any reason.

Truth: Once you sign your policy, the insurance company can cancel it only under certain conditions mentioned in the document mentioned above. State laws define what can be included in the policy’s waiver provisions. The policy is usually canceled due to non-payment or fraud. However, at the end of the term, the company may choose to discontinue the policy with the client, in which case the company must notify the client 30 days before the end of the term. If you believe that your policy has been canceled for unfair reasons, you can file a complaint with your Commissioner of Insurance. Contact information for all states is available on the website of the National Association of Insurance Commissioners.

Myth 6: The insurance company doesn’t care about my credit scores.

Fact: Credit scores affect your insurance rates. Insurance companies determine your financial reliability and credibility based on your credit score. Whether you have a history of defaults or arrears on credit card bills, interest, loans, etc., it helps the insurance company anticipate the risks involved in taking you as a customer and thus determine what insurance rates they offer you.

Myth 7: Accidents always increase my insurance rates.

Fact: Many auto insurance companies offer something called “Accident Tolerance First,” which means that your first accident will not negatively affect your premiums. Therefore, an accident does not necessarily increase insurance rates.

Myth 8: Younger drivers always pay lewd interest rates.

Fact: Not necessarily. Many auto insurance companies offer discounts to young drivers to supplement defensive driving credits. Others offer discounts to students under the age of 25 for exceptional academic performance. Students can also get discounts by installing airbags and anti-theft devices. Taking advantage of these discounts, the student driver can definitely enjoy affordable insurance rates.

Myth 9: Auto insurance covers the costs of items stolen from my car.

Fact: Generally, car insurance does not cover personal belongings left in the car. Some home insurance policies cover such items, but this varies from item to item and policy to policy.

Myth 10: If I was in an accident and the other party was at fault but did not have insurance, my insurance company would pay my compensation.

Fact: Not necessarily. If you have adequate collision or uninsured motorist coverage, damage to your vehicle and yourself will be covered. But you are alone if you don’t. That’s why some states require all drivers to have uninsured motorist coverage.

So what have we learned today (besides the fact that we can break our finger joints however we want)? We have learned that a statement does not become true simply because many people repeat it. All the data mentioned above led people to make poor insurance decisions. So save your friends and family some hard-earned money and spread the word about these auto insurance myths!

Bethany Collins works from home and is the mother of two naughty boys. She lives with her husband. Her only hobby is reading and her interest lies in topics related to personal finances, car insurance, etc. She loves writing on topics like managing her budget, getting auto insurance quotes, saving money, investing, etc.

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