Close Look at a Few Common Auto Insurance Myths

If people believe something to be true, their decisions can be affected by misinformation. It would be nice to get to the bottom of everything we have any doubts about by searching for the answers. Here are some vehicle insurance questions and facts. Test yourself to see how much of it you knew correctly.

– Red cars get more speeding tickets, and have higher insurance costs.
There is a statistical significance that police officers are more likely to hand a speeding ticket if you are driving a red car, especially a fire engine sports car. This is because they assume that you like speeding, looking at your car choice.

Most auto insurers do not ask the color of the vehicle in their quote forms. The color of the vehicle will not affect the cost of insuring it. However, the rates would go up if you receive more than usual number of tickets as a result of driving a red car.

– Having collision and comprehensive coverage will get me a new car if I get into a crash?
This is false. Having both covers is great for some people and perhaps necessary for many. But, it is unlikely that you will receive a new car. In most cases, the automobile will be repaired which will eliminate the need for getting a new one. Even it is totaled you will not be paid a new vehicle price and not even the amount you paid for it. Autos will lose their value over time and therefore, it is only fair that insurers pay the market value of a car of same age, make and model.

– Vehicle insurance premiums can be paid late as there is a grace period to keep the coverage.
False! policies do not work like credit cards where you have a period of no interest. If you are late making an auto insurance payment, the company is not obliged to give you the benefit of the doubt that you will pay. You need to check your policy for terms and conditions. Some companies do offer grace period and some don’t mention anything about it. Overdue premiums may lead to policy lapse and policyholder will be left unprotected.

Coverage will probably be reinstated when payment arrives but there may be late payment fee required. So, it is paramount to be sure to pay premiums on time. Consumers should not count on a grace period for late auto insurance payments. There may be such grace period but you should not take chances. Also, the grace period defined on the policy may apply to first missed payment but may not be offered to people who are regular late payers.

– Smaller vehicles can get out of accidents because it is easier to manoeuvre them.
Again, this is false. Little cars cannot take collisions as well as larger vehicles. Small vehicles have higher losses than bigger automobiles. A small auto can look like an accordion after a crash while bigger cars, in some instances, appear to have not been bothered with the whole accident.

Plus smaller automobiles cannot protect their passengers as good as the bigger and better built ones. This causes considerably much injury claims when they involve in a crash. That is why they may incur higher automobile insurance rates. Injury claims are expensive to deal with.

– If my automobile is totaled, the vehicle insurance firm will not pay off my loan.
This is true for a typical policy. Many people may believe differently, but how much you paid for the auto when it was new has no bearing on how much it’s worth later on. However, owners with an auto loan can purchase a GAP insurance to cover the difference between the loan and the current market value of the vehicle.

Particularly in the early years there can be considerable gap to cover. Cars lose as much as ten percent the moment they leave the showroom. Besides the lender will probably insist on such coverage before they agree to lend you the money.

– No-fault auto insurance means it is not your fault.
This is a huge misconception. Every state has own laws governing how coverage is bought. States with no-fault car insurance usually require each party to cover their own injuries and consequential losses regardless of who is responsible for causing the crash. This is to reduce litigations and speed up the claim settlements, not to relieve at fault motorists. If the accident is determined to be your fault you will see higher increases on your renewal premium.

Share on Pinterest
There are no images.