Car Insurance Myths Continue to Thrive

Car Insurance Myths Continue to Thrive
by Charlie Essmeier


For many people, auto insurance is considered only when buying a new vehicle. If consumers better understood auto insurance, they might be better protected and save money, too. Auto insurance is not something that most people think about often, and because of this, quite a few myths persist.

Here are several items that people often misunderstand about auto insurance:


Myth: The color of an auto affects the amount of the premium.

Fact: This myth has lingered for years; the common rumor is that red vehicles are more expensive to insure because the color is "sporty." This is just a rumor; the color of a car has no bearing on the amount of money you must pay to insure it.

Myth: Smaller deductibles are ideal, so you don't have to "shell out" should you have an accident.

Fact: It makes much more sense to go with the biggest deductible you can afford, as you will save a lot of money on your premiums. Most consumers will pay a lot of money in insurance premiums for the benefit of having small deductibles. Insurance is not designed to pay for every tiny expense; it's designed to protect you from big costs that would be hard to pay out of pocket. Do not pay more in order to enjoy a low deductible; it isn't worth it. Most people seldom have accidents, so they seldom have to file a claim.

Myth: Cheap cars cost more to insure than pricier models.

Fact: The cost of the vehicle is generally unrelated to the price of insuring it. The main factor is not the price; it's this - how likely is it that a certain car will cost the company money due to a payout? The insurance premiums are determined by a number of things, like how much the vehicle will cost to repair and the likelihood of the car being stolen.

Myth: The government sets rates, so you don't need to shop around for the best price.

Fact: Individuals can receive savings by shopping around for the best price, and smart shoppers will do so. State governments do have some say in how pricing works in a particular state, but the prices may be only guidelines. The United States government has no say whatsoever in how premiums are determined.

Myth: You don't have a need for any more coverage than the law requires.

Fact: The minimum amount of liability insurance may not protect you if you cause an accident with an expensive vehicle or if you cause significant bodily harm to another party in a wreck. You might consider buying more coverage than the minimum required in most states so that you might avoid a potential lawsuit.

It's well worth your effort to know the difference between insurance myths and facts. Staying in the know about auto insurance can not only protect you, but it can also save you money.




About the Author
©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including LemonLawHelp.net, a site devoted to information regarding lemon laws for automobiles and Car-Insurance-Help.net, a site about car insurance.