Myths and Legends of Car Insurance
By: Jay Tillotson | Posted: 13th February 2008
Urban legends exist about almost every aspect of life from weddings to kitchen appliances to household pets. Each country has its own urban legends and on the face of it, most sound plausible. Myths that exist purely as entertainment or to send a moral message are in themselves harmless, but what if the myth you believe could cost you quite a lot of money?
Car insurance is one area of life which is shrouded in legend, as unlikely as it may seem. Here we examine the 5 most common car insurance myths.
1. Protected No-Claims = Unchanging Premium
Some people believe that by paying the Protected No Claims fee on their premium means they will only ever pay that amount on their premium with their insurer, no matter what. This is simply not true. The fee is paid to protect the percentage of discount, not the actual amount. Some insurers include a clause in their small print which states they reserve the right to increase basic premiums for whatever reason they deem fit. For example, if you move to a different area, your basic insurance cost may rise if the new neighbourhood is considered more dangerous. Or, if you have to make a claim on your car insurance, your basic may rise. So even though you'll still have your discount, it'll come off a higher start price.
2. Speeding fines don't matter
To a certain extent this is true, but some cheap car insurance providers look at every little transgression as a reason to up the premiums or even refuse you insurance altogether. The fact that the Courts can impose a driving ban on someone for speeding too far over the limit means that insurers take a dim view on recklessness of this sort.
3. Driving convictions = No Insurance
It's not true to say that someone with a driving conviction cannot get car insurance; however the premiums they are quoted will invariably be much higher than a non-convicted driver in otherwise identical circumstances. Some insurers will take into account your previous driving history; if otherwise exemplary, the rise in premiums may be less than if there's a long list of offences. It's always best to shop around for specialist insurers in cases like this, as they will be more willing to take on a 'risk'.
4. Don't report minor accidents
There's the belief that reporting even the most minor accident will bump up your premiums (pardon the pun). The truth is that if you don't report a minor incident it could invalidate your insurance if something happens in the future as an indirect result of it. Just reporting an accident doesn't mean you have to make a claim; if the repairs will cost less than your excess there's usually no need to claim anyway. But you should always keep your insurers informed of anything to do with your car.
5. Putting insurance is someone else's name will save money
Yes it will, until it comes to having to claim and you find out that your nice cheap car insurance is actually invalid and worthless because you lied on your application. This trick is commonly used by doting parents trying to save their newly-passed teenager some money on their premiums, but insurers have wised up to it and are more thorough when processing claims.
About the Author
J Tillotson is a UK author specialising in Energy and Efficiency
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Tags: myth, extent, myths, conviction, recklessness, neighbourhood, kitchen appliances, premiums, insurer, insurance providers, urban legends, household pets, transgression, cheap car insurance, speeding fines, money car