Common Vehicle Insurance Myths

July 07, 2018


We are all subjected to false information and myths on how things work at one point in our lives. One con about myths is that they can lead someone into misguided and regrettable auto insurance liability decisions.

Over the years, a number of car insurance myths have been developed. This article seeks to debunk all those myths.

Buying from a Dedicated Agent is best

According to the myth, someone can get a low rate by buying insurance from a dedicated car agent that works with the insurance carrier.

On the contrary, you are more likely to get lower rates if you get more quotes from different companies. As you seek to get an affordable and reliable car insurance, shop and compare in your own, or deal with an agent who works with a number of highly rated insurance companies.

Your Rates Will Stay Low if you do not Report Accidents

According to the myth, failing to file a claim with the car insurance company will keep it away from knowing about the accident, and your car rates will probably remain where they are.

The truth is that if you get into an accident with another road user, he might claim injuries or damages. After a short time, the party that has been injured will file a claim against you and also your insurance company. This might end up increasing your premiums.

Insurance Costs for Red Cars is Higher

A number of people believe that insurance companies charge higher premiums for red cars.

However, a vehicle’s color has no impact on the cost of an insurance premium.

Auto insurance rates are determined by the car’s make, model, body type, engine size, age, the driver’s record, the age of the driver, and someone’s credit history. Other determinants are the cost of the car sticker, safety record, repair cost, and the rate of car thieves.

An Insurance Company Pays a Client’s Loan if Their Vehicle is totaled

Some people think that if their vehicle gets into an accident that results in a total loss, the insurance company will pay their full loan.

However, insurance companies pay off based on a car’s fair market value. A fair market value accounts for the original car’s value less its depreciation. Since the amount will be less than the loan balance, the owner is responsible for handling the difference.

Premiums are not Determined by Credit Ratings

Some people believe that insurance companies cannot use someone’s credit rating to determine premiums.

The truth, however, is that in many states, many insurance companies use credit history to determine the best rates for them.

Premiums Rise as Someone Ages

According to the myth, older drivers are more prone to accidents owing to their poor eyesight and slow reflexes, and thus such drivers are subjected to higher insurance rates.

The truth is that people who are above 55 years of age qualify for lower insurance rates because a number of insurance companies offer insurance discounts to mature drivers.

Now that you are informed, you will make better insurance decisions in the future. One thing to consider for a cheap insurance is safe driving, and making sure that you maintain a good deriving record. Also, get an auto insurance liability from a reliable carrier.


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