Auto insurance is mandatory in most states. Some feel like it’s more of a punishment, an added cost they have no choice but to pay if they want to legally drive a car. And with so many myths floating around about car insurance, it’s no wonder everyone thinks their rates are too high! Here are some popular misconceptions about insurance and the real truth.
- State minimums are enough. The truth is it probably isn’t. Accidents are expensive and if you get into one without adequate insurance, you’ll end up having to pay out of your own pocket. An accident with injuries can devastate someone without proper insurance.
- You only need liability insurance. Liability coverage is what protects you if you do damage to someone else’s property or injure someone in an accident. However, it won’t pay for damage to your own vehicle. So while many states only require you to buy liability coverage, you may want to consider comprehensive and collision coverage.
- Your auto insurance will cover damage caused by vandalism, weather, fire, or if the car is stolen. Maybe. It all depends on what kind of coverage you buy. We mentioned comprehensive and collision insurance. Collision is what the name implies – it provides coverage to your vehicle if it should collide with something else. But it’s comprehensive coverage that will kick in when a tree limb hits your car or it gets stolen. If it’s not mandatory where you live and you don’t have it, you may end up having to cover the damages out of pocket.
- The color of your car matters. We’ve all heard the myth that red cars are more expensive to insure and other color-based rumors. These are simply untrue. While there are many factors that go into your premium, the color of your car isn’t one of them.
- Your credit isn’t a part of your premium calculation. Sorry, but this one is untrue, too. Many insurance companies factor in your credit and if it’s not good, your rate will likely be hire. Insurers worry that if you’re having money trouble, you’ll be more likely to file a claim. Fair or not, it’s part of the equation. The good news? If your credit is good, it can lower your premium!
An insurance agent can help you figure out what kind of coverage you need and make sure you are protected. No matter what insurance company you choose, make sure you do your homework and don’t believe everything you hear!
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