I never had or involved in an auto accident, hence I don’t need Insurance at all. You can never say that you will never have an accident. By careful driving or luck you would have not been involved in accidents. Nowadays, auto insurance is made compulsory by statutory laws. Failing to carry auto insurance is an offense and would result in huge penalties. So first myth is false.
Auto Insurance Myths
Personal auto insurance covers both personal and business usage of the car. Personal auto insurance might be able to cover your business usage; however this has to be thoroughly checked with the insurer. If you occasionally use your personal car for business purposes such as transporting your clients, for business meetings or for hauling business equipment, then you will more than likely be required to extend your personal car insurance to cover your business use.
Without comprehensive coverage, the vehicel is still covered for theft, hail and deer accidents.
Most of the auto owners believe that if they purchase collision insurance they will get coverage against the damages to the car resulting from other resasons than driving accidents. They also think that they will be covered for incidents such as vandalism, hail, animal accidents and fire. This is not true. You definitely have to purchase both collision and comprehensive coverage in order to protect your vehicle fully from all of these situations.
The credit score has no effect on the insurance rate
Your credit score does matter in the insurance rate. Most of the Insurance companies take your credit score into consideration to determine the rate of your auto insurance policy. This is done at the time of purchase, change, or renewal of your auto insurance policy.
Males under the age of 25 pay more for auto insurance.
Usually males under 25 years of age are paying more for car insurance than female drivers under the age of 25. However, on the whole both teenaged makes as well as females pay more for auto insurance as studies have proved that these are the age groups that are typically involved in more automobile accidents.
The Most recent insurance premium would also cover for the new car
This could be true to an extent as most of the insurance policies require the policyholder to notify the car insurance company or agent about acquiring a new car within a specified number of days after purchase.
Insurance Rate is fixed by the federal government
The federal government never fixes any rate for auto insurance. Fixing the rate of auto insurance is done at the sole discretion of the state insurance department based on various parameters such as the state laws, regulations and requirements.
No fault means it is not my fault.
In general ‘no fault’ insurance means that your insurance company will pay for the damages irrespective of who is at fault in the case of an accident claim.
If I lend my car to my friend who meets with an accident, his/her insurer will pay for the damages. It is the auto owner insurance, which pays the damages. May be your friend’s insurance could cover the excessive damage if it exceeds your policy limit. Though you have not done anything on this accident, your name would still appear in the insurance records in relation to the accident and that can cause your rate to go up.