The Ten Most Common Car Insurance
It’s easy to believe in car insurance myths especially if no one
bothered to know what it is all about. Because of these myths, there are people who don’t bother getting
their car insured. According to studies, 14% of Americans have no car insurance and these myths can be one of
the reasons why they never bothered to. Here is some car insurance myths that you need to
· “I can use my car for my second job
delivering pizza and my insurance policy will cover an accident” – this is a wrong understanding on how car insurance
policy works. This can only be done if you have bought a commercial car policy that specifically excludes coverage
while the covered car is used for business or commercial purposes.
· “I got a ticket and my car insurance
premium will increase in double!” – one ticket on your driving record will still qualify for the Good Driver Discount however it
will depend on the type of ticket you have. Insurance companies have internal point systems that will grade you and
configure the risk that your ticket represents.
· “If someone breaks in my car, steals my
personal belongings like my laptop, my car insurance will pay me back because I bough full
coverage” – full
coverage does not mean everything is covered. There are specific limits when you say full coverage. This means that
there is no insurance policy that can cover everything. So if a personal item got stolen from your car, a claim
must be filed through your Renters Insurance or Homeowners Insurance policy. By doing so, you will have to pay the
· “Credit history has nothing to do with my
car insurance rate” –
actually, some companies take a driver’s credit history account. This is also another way in which they can provide
you with an amount to pay for your premium. If you have a low credit score, then there is a chance that you can pay
a low premium rate. However, if your credit score is bad, expect a high premium. Remember that credit scores show
how you are as a payer.
· “A red car also means high payment of car
insurance premium” –
there are a number of factors affecting your policy. Insurance companies based their rate on your age, driving
history, sex, coverage type, car model, make, engine size, car’s safety record as well as it’s potentiality of
being stolen. So your car color does not generally affect the amount of premiums you pay.
· “Only the minimum coverage is
important” – keep in
mind that each state requires a minimum level of insurance coverage. This means that there are specific amount of
coverage that you need to pay. They vary in every state but these limits are very low but at the same time
required. If you don’t get other types of coverage, you may find yourself paying for any damage that might incurred
in the event of an accident.
· “My car insurance covers any type of car I
drive” – every policy
is different. Some companies may transfer the minimum state liability requirements while others cover broad
coverage policy that transfer your specific liability limits. However there are companies that cover only the
specified driver and the rest are excluded from the coverage.
· “If my car is stolen and still unpaid, my
insurance will pay the whole loan” – this is only true if you bought GAP insurance
when you bought your car. But if you have the comprehensive insurance and your car is stolen the insurance
company will establish a fair market value of your pre-accident and pay you the actual cash value of your
· “My insurance will pay for my rented
car” – insurance
companies don’t pay for rented cars unless you have purchase car rental expense. This coverage is sold only
together with your comprehensive and collision coverage.
· “Insurance companies make up prices and
charge whenever they want to” – the premiums charged to you are calculated and the rates are filed for review and for approval
or rejection. So any increase or decrease must be approved first.