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Drivers Ed

8 Auto Insurance Myths

Does the color of my car determine my auto insurance rate? I hear that my credit score has no bearing on my insurance premium. I already have auto insurance coverage so my new car is covered...right?

Maybe not! Here's a list of fallacies many car owners believe and drive by each day. The truth just might surprise you...

Myth #8 "The color of my car affects my insurance rate."
False. The color of your car doesn't impact your auto insurance rate. Factors such as your vehicle's year, make, model, body type, engine size, credit history and driving record do impact your insurance rate.

Myth #7 "No-fault insurance means, it's not my fault!"
False. No-fault insurance means that your insurance company pays for your damages regardless of who's at fault.

Myth #6 "If I lend my car to a friend and that friend is in an accident, his or her insurance company will pay for the damages...right?"
False. It's your car, so it's your responsibility! And even though you weren't present at the time of the accident, you still will receive a mark on your insurance record and your insurance premium could possibly go up.

Myth #5 "I recently paid my insurance premium, so the new car I just purchased is covered."
Not necessarily. Check with your auto insurance company. Most automobile policies require that the policyholder notify the insurance company or agent within a specified number of days, if indeed coverage is desired for the newly purchased vehicle.

Myth #4 "Even without comprehensive coverage, I'm still covered for theft, windstorms, hail and deer accidents."
False. Many drivers believe that if they only purchase collision insurance, which covers accidents involving objects, that they will also be covered for incidents that involve vandalism, hail, animal accidents and fires. That's not true. You need to purchase both collision and comprehensive coverage in order to fully protect your vehicle from all of these situations.

Myth #3 "My credit score has no affect on my auto insurance rate."
False. Your credit score really does matter! Many Insurance companies take your credit score into consideration when deciding to increase or renew your auto insurance coverage.

Myth #2 "My personal auto insurance covers both my personal and business use of my car."
False. If you occasionally use your personal car for business purposes such as transporting clients, going to and from meetings or hauling business equipment, then you will more than likely need to extend your personal car insurance to cover your business use as well. If your employees use their car while working for you, you will want to also obtain a separate non-owned car insurance policy.

Myth #1 "I've never had or been involved in a car accident, so I don't need automobile insurance."
False. Even if you've been lucky enough never to have been or to be involved in an accident, if you ever do have an accident, your risk of losing everything is great. Car insurance is the best protection you can have in the event an automobile accident occurs. It's also a legal issue - you are required, by law, to have some basic form of auto insurance, and failing to do so carries some fairly strict punishments.

Original article can be found at Insurance.com: 10 Car Insurance Myths