Auto insurance is one of the most sought after insurance policies there is in an approach to safeguard ones vehicle from theft, damages, accidents and other mishaps. However, for many individuals, there is a great deal of misunderstandings that need to be debunked as a measure to fully understand all the aspects of the policy. Enlisted are five of the top myths about auto insurance that are explained in brief so as to understand the requisites of these policies and plans.
1. All states require liability insurance.
Not True. While most states in the U.S. make it mandatory for individuals to possess an auto insurance policy, not all states do. However, irrespective of whether a state makes it mandatory or not, it is vital to obtain one so as to avoid any penalization and fine that may occur from any mishap that could occur.
2. Standard Collision Coverage protects from all damages.
False. While standard collision coverage does protect a vehicle from accidental damage, it only states to cover accidents that occur with the collision of another vehicle. It is imperative to seek a comprehensive coverage plan that protects the vehicle from hail, theft, windstorms and accidents with animals as well.
3. New vehicles are covered under insurance automatically.
True and False. Most auto companies do provide insurance on new vehicles at the time of the procurement; however, this coverage is temporary and needs to be validated by a established insurance agency at the time of expiration.
4. The insurance covers damages that are coveted by a friend’s accident in my car.
False. An insurance policy is granted on the vehicle owner’s name. Hence, if a friend or any other person is responsible for the damage, it would not be covered by the owner’s insurance plan. It would then become the liability of the friend or other driver to pay for the damages which they can opt for through their own insurance policy.
5. Credit score does not influence the insurance rate.
False. While it may not seem so, a credit score will play a partially important role in establishing the rate of insurance. Insurance agencies generally supply discounted insurance rates if the applicant’s credit score is positive. It becomes all the more difficult for individuals to obtain a good insurance policy with a negative line of credit.
