Auto Insurance Myths and Misunderstandings
When you set out to purchase automobile insurance, you’ll probably hear all kinds of advice from family, friends and co-workers, some of it confusing or even conflicting. The Insurance Information Institute (III) offers consumers a helpful lesson about the rumors they hear about auto insurance in a discussion of eight insurance “myths and misunderstandings.” For a brief recap:
Myth 1 – Color determines the price of auto insurance.
While the price of your auto policy is based on many factors, such as car make, model, body type, engine size, age, and safety record, the color of your vehicle doesn’t matter. Forget about “Arrest Me Red”!
Myth 2 – It costs more to insure your car when you get older.
On the contrary: older drivers who don’t drive much can get reduced rates. Seniors can get special discounts, e.g., by taking an accident prevention course from AAA or AARP.
Myth 3 – Your credit has no effect on your insurance rate.
Afraid not: Your credit history shows how you manage your finances and can even predict whether you’re more likely to file an insurance claim. Good credit = lower rates.
Myth 4 – Your insurance will cover you if your car is stolen, vandalized or damaged by falling tree limbs, hail, flood or fire.
It will, but only if you purchase comprehensive and collision coverage, which will fully protect your vehicle from all types of damage, along with your standard policy.
Myth 5 – You only need the minimum amount of auto liability insurance required by law.
Buying only the minimum amount of liability means you are likely to pay more out-of-pocket for losses incurred after an accident—and those costs may be steep.
Myth 6 – If another person drives your car, in the event of accident, his or her auto insurance will cover the damages.
In most states, the car owner’s —your—insurance company must pay for damages caused by an accident, regardless of who is driving. Know the rules before you let another person drive your car.
Myth 7 – Soldiers pay more for insurance than civilians.
Wrong again: if you are serving in any branch of the military, you qualify for a discount on auto insurance. Some insurers offer discounts to veterans and their families.
Myth 8 – Personal auto insurance also covers business use of your car.
If you are self-employed and use your vehicle for business purposes, you might need to buy business vehicle insurance. Find out whether or not your personal auto insurance protects you.
At Hudson Law Firm, we put PERSONAL back into Personal Injury Law. For an injury claim evaluation, call us at (972) 360-9898, or visit our website to chat with an associate. We understand and care about your injury, and look forward to helping you with your accident claim.