5 Car Insurance Myths That Need to Go Away

Written by Mike

Buying car insurance can be confusing enough. If you believe the many myths that continue to circulate the industry, you may find it nearly impossible to purchase a policy with confidence.

Here are five common car insurance myths that you should never believe.

1. The Color of Your Car Will Greatly Determine How Much You Pay For Insurance

For many years, it has been said that red cars are the most expensive to insure. However, this is not true. The color of your car has nothing to do with your premium. In fact, most insurance companies will never ask the color of your car when putting together a quote.

In short, if you like red you should buy red – this will not effect how much you pay for coverage.

2. Nobody Wants to Steal an Old Car

Many people believe that having an old car protects them against thieves. Believe it or not, the opposite is actually true. Thieves would rather target an old car as they do not have as many safety features.

With this in mind, you don’t want to drop too much coverage just because you have an older vehicle. You may save money on your monthly premium but you are also taking a big risk.

3. If My Car is Stolen My Policy Will Cover Me

This may be true, but it may also be false. Unless you have comprehensive coverage you are not going to receive protection against a stolen vehicle.

When shopping for a policy you may be interested in minimum coverage. After all, this will allow you to save as much money as possible. That being said, you are not getting the protection you need against theft, vandalism, or damage by fire.

Simply put, if you only buy liability coverage you should not expect to receive any compensation should your vehicle be stolen.

4. If I Total My Car, My Policy Will Pay Off the Total Amount That I Own on My Loan

This is one of the biggest myths out there. It is also one that can cause you a lot of financial stress.

Just because your car is totaled does not mean you are going to receive the entire pay off. Instead, you will receive the cash value of your car, less any  deductible. This means that you may have a gap between how much you receive from your insurance company and the amount that you owe on your loan.

Tip: you can purchase gap insurance to protect against this.

5. Rental Car Coverage is Included

Time and time again, people find that they need a rental car – due to an accident – but realize that their policy is not going to pay for it.

In today’s day and age, you will likely have to add rental car coverage to your policy. This is not something that is included.

Note: most car insurance companies only charge a couple of dollars per month for rental reimbursement coverage. Is it worth the small cost to you?

Don’t let these myths stand in your way!

This entry was posted in Auto by Mike.