Top 10 Misunderstood Things About Car Insurance – After spending many years in the insurance industry we have come up with a top 10 list of most misunderstood things about car insurance. These car insurance myths are some of the most common questions that most people have about direct car insurance either buying or reviewing their auto insurance coverage. It’s better to find out now before you have a claim and it’s too late.
Reality: If this is your first ticket your rates probably won’t even change. Most direct car insurance providers will give you a pass if you don’t have any other tickets or claims in the past 3 to 5 years depending on the company.
Reality: If you didn’t pay the credit card you charged it on then it just might. Almost all insurance companies now use some form of credit scoring when determining not only if you will qualify for insurance, but also what you will pay. There can easily be a 50% difference in rates for a person with excellent credit to someone with poor credit.
Reality: Your homeowner’s coverage has nothing to do with covering your car. The only way your car will be covered is if you have Comprehensive (Comp) coverage for your car. And then only after you pay your deductible.
Reality: It will but only after your friends’ policy pays first. So let’s say your friend has a $500 collision deductible and you have a $250 deductible. You would have to give your friend the $500 for his deductible as his insurance company is Primary. Meaning your insurance will only pay after his policy limits are exhausted. So just remember in this scenario your deductible does not matter its going to be based on your friends.
Reality: If you get hurt or killed while riding your bike or even walking down the street you may be surprised to learn that you may be covered by your direct car insurance policy. If the person driving the car didn’t have any insurance or not enough insurance to cover your injuries, your Uninsured or Underinsured coverage would pay for your claim.
Reality: Your car insurance does not cover your personal belongings left inside the car. You are going to have to file a claim with your Homeowners or Renters insurance policy to be compensated for these items. The general rule of thumb is your car insurance will only pay for items that are attached to the vehicle
Reality: The color of your car has absolutely nothing to do with your rates. If you like red buy a red car if you like black buy a black car. Don’t ever let this silly nonsense stop you from buying a car.
Reality: Not having continuous car insurance is frowned upon by most direct car insurance companies now a day’s. Some companies won’t penalize you for not having prior insurance. If you don’t have prior insurance make sure you have a good excuse like you took the bus, or you were in the military, or some other legitimate reason. Oh and by the way I couldn’t afford my insurance is not on that list
Reality: This is one of the worst things a person can do. If you lie on your insurance application there is a good chance you won’t have any coverage when you need it the most. You think they won’t find out? Remember these 2 things when the insurance company is on the hook for a ton of money. #1 They are going to start asking questions and the first thing they look at is your application. Wouldn’t you if you were them? And reason #2, the insurance companies have more money than god and they have people working full time to find this stuff out.
Reality: There are a lot of different factors insurance companies use to determine rates, however, there are many times where the rate for the more expensive car is less than the cheaper car. One of the biggest factors for the Comp & Collision coverage’s are how much do replacement parts cost. Sometimes on those cheaper cars or the more exotic cars, the replacement parts can cost a lot to replace.
So just remember the next time your online looking for a cheaper insurance policy, to consider some of your options. There are hundred’s of direct auto insurance companies out there looking to get in your pocket, just make sure when the time comes you can get into theirs.