For a lot of people, car insurance is thought about only when purchasing a new car. If consumers better understood car insurance, they might be better protected and save money, too. Car insurance is not something that most people think about often, and because of this, a lot of myths abound.
Here are a few things that consumers often misunderstand about auto coverage:
Myth: You don't need any more insurance than your state's law requires.
Fact: The minimum amount of liability coverage might not help you if you cause a wreck with a luxury car or if you cause extensive bodily harm to another party in an accident. You ought to think about carrying more insurance than the required minimum in most states in order to prevent a possible lawsuit.
Myth: Low-cost cars are more expensive to insure than more expensive models.
Fact: The costs of insurance are based on a number of factors, including how much the car will cost to repair and the odds of theft of the vehicle. The main factor is not the price; it's this - how likely is it that a certain car will cost the insurance company money due to a payout? The cost of the car has little to do with the price of covering it.
Myth: The color of a car can affect the amount of the premium.
Fact: This is simply not true; the color of a car has no bearing on the price you have to pay to protect it. This myth has been around for ages; the prevalent rumor is that red cars cost more to cover because that particular color is "sporty."
Myth: Lower deductibles are better, so you won't have to "pay out" should an accident occur.
Fact: It makes much more sense to go with the highest deductible you can afford, as you will save a lot of cash on your premiums. Most individuals rarely have accidents, so they rarely have to submit an insurance claim. Many, if not most people are paying quite a bit of extra money in premiums for the benefit of having low deductibles. Auto insurance is not designed to pay for every small expense; it is designed to protect you from big expenses that would be hard to pay out of pocket. Don't pay extra in order to have a low deductible; it is not worth it.
Myth: The federal government sets rates, so there is no reason to shop around for the best price.
Fact: The Federal government has no say whatsoever in how premiums are determined. Consumers can save some money by shopping around for the lowest price, and savvy consumers will do just that. State governments do determine how insurance pricing works in a particular state, but the figures are just guidelines.
Staying informed about car insurance can not only protect you, but it can also save you money. It can be well worth your time to know the difference between auto insurance rumors and facts.
©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including LemonLawHelp.net, a site devoted to information regarding
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