Car Insurance Myths Fact or Fiction?
There is a lot of places to find information regarding auto insurance on the internet. Some of this information is true while some of it is nothing other than urban legend.
Insurance myths can lead to higher premiums if you do not know how to properly assess current rats and coverage.
The color of a car does not raise the premium of a car insurance policy. So if you want to go out and buy that red or black sports car, you can. You will pay just as much for car insurance as you would if you were to buy a pink or plaid sports car.
I've put this section together to expose some of the most common car insurance myths. Make sure you familiarize yourself with all of them so you don't fall victim to misperceptions and overpay for insurance coverage.
Car insurance myths we expose in this section:
- Buying online insurance is not as reliable.
- A car's color will affect its insurance rate.
- Coverage for males under 25 is more expensive.
- The car I just bought is covered by my insurance?
- Credit history does not affect my insurance rate.
- A friend wrecks my car, his policy covers me.
- The cheapest car insurance rate is the best for me.
- Auto insurance companies reward loyalty.
- No-fault insurance means it's not my fault.
Online Car Insurance is not as Reliable
Car Insurance Myth #1 - Online auto insurance coverage is not as reliable as buying car insurance from a brick-and-mortar company.
This myth is NOT TRUE. This is a huge misconception we can thank our parents and grandparents for passing down to us. Not understanding the Internet, most of the older generation will tend to stay away from things they don't understand or continue to do it the way they've always known to be safe.
The misconception is that online insurance companies provide a "cheaper" price because the insurance coverage is less reliable or not as good as offered at a brick-and-mortar company.
Fact is, the same auto insurance coverage offered to you from brick-and-mortar companies is the same coverage offered online. No matter where you buy your car insurance, we recommend you always read the fine print to ensure you're receiving and comparing equal coverage.
The reason you may receive cheaper pricing with an online insurance company is their overhead is extremely low. They don't have to staff offices, pay agents or pay the high cost of utilities. Because of the high level of competition, these companies pass on the saving to the consumer. Read my section on where to find free car insurance quotes online here.
A Car's Color Affects its Insurance Rate
Car Insurance Myth #2 - A car's color will affect its insurance rate.
This myth is NOT TRUE. The color of a vehicle will not increase your insurance rate. Factors that will affect your insurance rate is the year, make model, and engine of the vehicle. Also the drivers age and driving record will also play a role in the rate you'll pay.
So if you want to go out and buy that bright red sports car instead of the blue one. You have my permission to go buy it today!
Recommended Online Car Insurance Sites
Liberty Mutual has been around since 1912. They help consumers protect and preserve what they've earned, own, built and cherish. Keeping their promise when your in need means Liberty Mutual will be there when you need them most.
Esurance is there when you need them. Rated with A.M Best as an A+ business, esurance will provide you with an auto insurance quote, not someone sorta like you. You fill out one form and they'll search several companies to find the best coverage for your driving needs.
Car Insurance Rates for Males Under 25 is More Expensive
Car Insurance Myth #3 - Car insurance rates for males under the age of 25 tend to be more expensive.
This myth is both TRUE and FALSE. Sorry guys, the car insurance companies are going to get you twice during your life. Once as a young man and then when becoming a senior citizen.
Statistics show that males under 25 will pay more for car insurance than females in the same age group. Across the age range of all drivers, seniors and teenagers pay the highest for car insurance due to they are typically in more accidents.
The Car I Just Bought is Covered by my Insurance
Car Insurance Myth #4 - I just paid my insurance premium, I don't have to worry about the new car I just purchased, because it's covered.
This myth is TRUE. However most insurance policies require you to notify your personal car insurance agent or company with the new cars information within a certain amount of time. To be safe you should notify your agent as soon as possible when purchasing a new or used car or adding a vehicle to your current insurance policy.
Personal Credit Does not Affect Car Insurance Rates
Car Insurance Myth #5 - How good or bad my personal credit history is has nothing to do with the car insurance rate I will pay for coverage.
This myth is FALSE. Everyday more and more car insurance companies are taking into consideration your credit history and score when you purchase, renew or change your auto insurance policy. Insurance companies have found a direct correlation to people with bad credit tend to also carry a higher insurance risk.
A Friend Wrecks My Car, His Insurance will Cover Me
Car Insurance Myth #6 - My friend is driving my car and gets into an accident. Since he is driving when he has the accident his insurance company is responsible and will pay for any damages incurred.
This myth is FALSE. I know this just doesn't seem fair but it's your car and your responsibility. Your friend's insurance may kick in to help pay for any damages that exceed your insurance coverage.
Also your friend getting into an accident will go on your insurance record and your premiums may go up. You should always think twice before letting a friend drive your car.
The Cheapest Insurance Rate is the Best for Me
Car Insurance Myth #7 - The cheapest car insurance rate is the best for me!
This myth is NOT TRUE. Don't get me wrong, price is a very important factor when it comes to selecting a car insurance policy. However, it should not be your only consideration when shopping for car insurance. It's also important you select the right level of policy coverage to make sure you protect yourself in case of any unforeseen problems.
Since the level of competition in the car insurance market is so high. Insurance companies will strip out certain elements like windshield coverage that use to be standard, to cut their premiums.
When shopping for car insurance policy prices, it's important you not only shop for the level of coverage you need but when shopping different insurance companies, you're also comparing apples-to-apples.
Insurance Companies Reward Loyalty
Car Insurance Myth #8 - Insurance Companies Reward Loyalty.
This myth is FALSE. You would think that insurance companies would give their best deals to their most loyal customers but that's not how it works. Most insurance companies will reserve their most competitive deals to recruit new customers and rely on their long time customers to be too lazy and comfortable to shop around once their current policies come up for renewal.
There are very few insurers that will reward you for being a loyal customer with them. If you find one, it is best you read the fine print to make sure you will truly save more money than the money you would save by taking the time to shop around.
It is well worth your time to see how much money you may save by switching to a competitor. Even if you'd like to stay with your current insurance company, you can ask them to match the best quote you received by shopping around online elsewhere.
No-Fault Insurance Means it's not My Fault
Car Insurance Myth #9 - No-Fault insurance means that I will never have to worry about an accident being my fault.
This myth is FALSE. Many car insurance buyers do not understand the term "no-fault" when it's used in car insurance terminology. No-fault, personal injury protection (PIP) is not available in all states.
No-fault car insurance coverage means your car insurance will pay for your injury related bills regardless of who is at fault at the time of the accident.
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My Recommended Auto Insurance Sites
Libery Mutual and esurance are the quickest way to see what insurance coverage will cost you on the vehicle you want to buy. These online sites will provide you with free, no-obligation quotes and the prices are normally pretty good. You can also use these quotes to negotiate an even better price with a dealership.
Continue to our section on Auto Insurance Discount Tips.