After spending many years in the insurance industry, we’ve put together a list of the 10 most misunderstood things about auto insurance. These auto insurance myths are some of the most common questions most people have about direct auto insurance, whether shopping for or reviewing their auto insurance coverage. It’s better to find out now before you have a claim and it’s too late.
- I just got my first speeding ticket. My insurance rates are going to go up a lot..
Reality: If this is your first ticket, chances are your fares won’t even change. Most direct auto insurance providers will give you a pass if you have no other tickets or claims in the last 3 to 5 years, depending on the company.
- That New Plasma TV I Bought Last Year Won’t Affect My Car Insurance
Reality: If you didn’t pay the credit card you charged it on, then that might be the case. Almost all insurance companies now use some type of credit score to determine not only if you’ll qualify for insurance, but also what you’ll pay. There can easily be a 50% difference in rates from someone with excellent credit to someone with bad credit.
- I just slammed my car door against my lawn mower parked in my garage, my homeowners policy will cover it
Reality: Homeowner’s coverage has nothing to do with your auto coverage. The only way your car will be covered is if you have Comprehensive (Comp) coverage for your car. And then only after you pay your deductible.
- I just broke into my friend’s car and I tell him not to worry my insurance will cover it.
Reality:It will, but only after your friends’ policy pays out first. So, let’s say your friend has a $500 collision deductible and you have a $250 deductible. You would have to give your friend the $500 for his deductible since his insurance company is Primary. Which means your insurance will only pay out after your policy limits are used up. So remember in this scenario that your deductible doesn’t matter, it will be based on your friends.
- If you are riding a bicycle and get hit by a car, your car insurance will not be affected.
Reality: If you are injured or killed while riding a bike or even walking down the street, you may be surprised to learn that you may be covered under your direct auto insurance policy. If the person driving the car did not have any insurance or did not have enough insurance to cover your injuries, your uninsured/underinsured coverage would pay your claim.
- Someone just broke into my car and stole all my personal belongings ie CDs, cell phone, Christmas presents, my auto insurance will pay for it.
Reality: Your auto insurance does not cover your personal belongings left inside the car. You will need to file a claim with your homeowners or renters insurance policy to receive compensation for these items. The general rule is that your auto insurance will only pay for items that are attached to the vehicle.
- They are going to charge me more for my Auto Insurance because my car is red, blue, black, pink…
Reality: The color of your car has absolutely nothing to do with your rates. If you like red buy a red car, if you like black buy a black car. Never let this nonsense stop you from buying a car.
- I have not had a car for the last 2 years, this will not affect my rates.
Reality: Not having continuous auto insurance is frowned upon by most direct auto insurance companies today. Some companies will not penalize you for not having prior insurance. If you don’t have prior insurance, make sure you have a good excuse, like you took the bus, were in the military, or some other legitimate reason. Oh and by the way, I couldn’t pay, my insurance is not on that list.
- Telling a little white lie on my insurance application will not affect my coverage if I ever have a claim
Reality: This is one of the worst things a person can do. If you lie on your insurance application, chances are you won’t have coverage when you need it most. Do you think they won’t find out? Remember these 2 things when the insurance company is in trouble over a ton of money. #1 They will start asking questions and the first thing they will see is your application. Wouldn’t you if you were them? And reason number 2, the insurance companies have more money than god and they have people working full time to find out these things.
- Buying a cheaper, more reasonable car will cost less than insuring a more expensive car.
Reality: There are many different factors that insurance companies use to determine rates, however many times the rate for the most expensive car is less than the rate for the cheapest car. One of the most important factors for Comp & Collision coverage is how much replacement parts cost. Sometimes on those cheaper cars or the more exotic cars, replacement parts can cost a lot to replace.
So remember that the next time you’re online looking for a cheaper insurance policy, consider some of your options. There are hundreds of direct auto insurance companies looking to get into your pocket, just make sure when the time comes they can get into yours.
bryan valdo
