All car owners need auto insurance because it is the law. However, many insurance policies are immensely complex and with so many wrong information all around, it is likely that some people will commit mistakes along the way. Confusion will lead to expensive mistakes and this is the reason why it is important to compare insurance quotes in order to come to a more informed decision. From rates for car insurance to premium, read some of the most common car insurance myths, debunked:
Myth Number 1: The most expensive cars to insure are red cars.
Debunked: This myth has been around for ages. Fortunately, this is exactly what it is, merely a myth. Colour is not a factor in determining the rates for car insurance. However, recent surveys show that approximately 25% of drivers believe that the colour of their car is a factor in determining their insurance rates, particularly red cars. The reality is that all insurance companies will not even ask the colour of the vehicle when calculating quotes. They are bound to ask the car model, the body type, engine size and the age of your car.
Myth Number 2: New cars are likely to be stolen
Debunked: The reality is, it is the other way around. According to the National Insurance Crime Bureau, the top ten most stolen vehicles of 2008 were:
1. Honda Civic (1995)
2. Honda Accord (1991)
3. Toyota Camry (1989)
4. Ford F-150 (1997)
5. Chevrolet C/K 1500 (1994)
6. Acura Integra (1994)
7. Dodge Ram Pickup (2004)
8. Nissan Sentra (1994)
9. Toyota Pickup (1988)
10. Toyota Corolla (2007)
The reason why most car thieves prefer older cars is that they are much easier to steal than newer cars. In addition, since most car owners are keeping their cars longer due to the unstable economy, the market for used car became in demand. Most of the time, stolen older cars do not make it back on the streets in one piece.
Myth Number 3: Bare bones car insurance can provide coverage for stolen, vandalized or cars damaged by hail or fire.
Debunked: The minimum requirements for auto insurance in most states only require car owners to purchase liability coverage. This means that you are only covered for any damages you cause to other people. Unless you have comprehensive coverage, you are not fully protected from other occurrences.
Myth Number 4: Car insurance companies will pay off the policyholder’s loan or lease once a car is totalled.
Debunked: Most car insurance provider will not promise to pay off its customers’ loans once insured cars are wrecked. However, they will pay the actual cash value of the vehicle except for the deductibles. Any outstanding amount on the loan or car lease is the sole responsibility of the policyholder, not the insurance provider. On the other hand, if you bought gap coverage, you may be able to save yourself some grief. Gap coverage provides coverage to a policyholder once the insured car is wrecked before the loan is paid off when the accident occurred or before the term of the lease expires.
Myth Number 5: Sports car drivers get more violations; therefore, they pay higher premiums.
Debunked: This is not necessarily true. In fact, studies shows that in 2009, people who drove Hummers H2/H3 have five times the number of traffic violations than the average car owners. On the other hand, the most “well-behaved” cars are people who drove Jaguars XJ. While insurance providers do not base their rates on this study, the type of vehicle you own and your driving history are important factors that they will consider.