Common Auto Insurance Myths

By Compuquotes Team on March 27th, 2008

Auto Insurance

There are countless myths about auto insurance that supposedly save you money or cause your insurance rates to increase. The color of your car has an impact on your insurance premium, as well as your credit score, right?

A common myth is that no-fault insurance means it's your fault. This is completely not true. No-fault insurance means that your insurance company pays for your own damages regardless of whose fault the accident was.

Many people believe that the color of their car affects their insurance rate which is also untrue. The color of the vehicle that you drive doesn't have an impact on your insurance price, what does is your vehicle's year, make, model, body type, engine size, as well as your credit history and driving record.

A common myth is that if you lend your car to a friend that is then involved in an accident then their insurance company will cover the damages, wrong! Your vehicle is your responsibility and even if you were not present at the time of the accident you will still receive a negative mark on your insurance record causing your rates to increase.

It is a common belief that your insurance rate is determined by the government. This is not true because the government has nothing to do with your insurance rate. However where you live, your credit score, marital status, and your driving record all affect your insurance costs.

Most people think that it is a fact that males under the age of 25 pay more for auto insurance than female drivers their age. It is common for all teenagers and young new drivers to pay a higher amount for auto insurance than those who are more experienced behind the wheel. This is because who are in this age group are more likely to be involved in an auto related accident.

It is not talked about very often but your credit score does affect the price of your auto insurance. The majority of auto insurance companies take your credit scored into mind when they are determining to increase or renew your auto insurance policy.

It is a huge misunderstanding that if you don't have comprehensive coverage you will still be covered for theft, windstorms, hail, and animal related accidents. It is very unfortunate for people to believe they will be covered for these damages if they purchase collision insurance, which only covers accidents that involve objects. To be covered you need to buy both collision and comprehensive coverage to be totally protected when it comes to your vehicle.

If you use you personal vehicle for business purposes such as transporting employees to and from the airport, then you will need to extend your auto insurance to cover your business use of the vehicle as well.

By far the worst myth of all is that if you don't need car insurance if you have never been in an accident before. If you are lucky enough to have avoided an accident so far then you should use that in your advantage and protect yourself before something unexpected happens.

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