Soft drink sugar tax starts, but will it work?
Ten Auto Insurance Myths Debunked
We've all heard a few old wives tales. Like the one about cracking your knuckles and how doing so will give you arthritis. It has no basis in fact by the way, so go knock yourself out. Old wives tales, myths, urban legends- call them what you will - generally crop up around things that are important to us but we can't quite understand. Given that auto insurance is mandatory in our country, significantly affects our wallets every month, and is actually a pretty complicated, confusing subject, it's no wonder that there are quite a few auto insurance myths out there. Today we'll debunk 10 of the most common and misleading auto insurance myths.
Myth 1: I'll save money by going for the cheapest quote available.
Fact: When you buy auto insurance, you're basically purchasing peace of mind and the knowledge that an accident won't mean the end of your savings and a lifetime of debt. However to ensure that you will be covered for any losses or damages, it's better to opt for automobile insurance quotes from a company that has a reputation to maintain and the means to pay out when you make a claim. Opting for an obscure, fly-by-night insurance company just because it gave you the cheapest quote is a bad idea. If it rejects your claim, or does not have the funds to pay out, you could potentially lose a fortune.
Myth 2: All I need is Minimum Liability.
Fact: Yes and No. Minimum liability is all you need in order to drive legally. However, it is definitely not all you need if you want to be covered in the event of an accident. Minimum liability is the minimum car insurance you are required to purchase to drive legally, and the amount varies from state to state. But there are many accident scenarios which are not covered by minimum liability. Liability only covers damage caused by your car to others'. It does not cover damages to or theft of your own car. At the very least, it is advisable to get comprehensive and collision coverage as well as liability.
Myth 3: Red cars cost more to insure.
Fact: No. The color of your car has no bearing on your insurance rates. The make, model, and condition of your car do affect your insurance rates, but the color does not.
Myth 4: Rusty, old cars are cheaper to insure.
Fact: An old, deteriorating car will cost more to maintain, will need repairs more frequently, and has less security devices. This makes it a greater risk for insurance companies, and so they usually charge higher premiums on these cars. Second hand cars that are only a couple of years old and are in a good condition tend to fetch the best car insurance rates.
Myth 5: My insurance company can cancel my policy at any given moment, for any reason whatsoever.
Fact: Once you have signed its policy, an insurance company can only cancel it under certain conditions that were mentioned in the aforementioned policy. The State laws decree what can be included in the cancellation provisions of the policy. Usually, a policy is cancelled on grounds of non-payment or fraud. However, at the end of the term, a company may choose to discontinue the policy with a customer, in which case, the company must give the customer 30 days notice before the end of the term. If you believe that your policy was cancelled on unfair grounds, you can file a complaint with your Insurance Commissioner. Contact information for all states is available at the National Association of Insurance Commissioners website.
Myth 6: The insurance company doesn't care about my credit scores.
Fact: Credit scores do affect your insurance rates. Insurance companies determine your financial reliability and credibility on the basis of your credit scores. Whether or not you have a history of defaults or arrears on credit card bills, interest, loans, etc, helps the insurance company anticipate the risk involved in taking you on as a client, and hence determines what insurance rates they offer you.
Myth 7: An accident will always increase my insurance rates
Fact: Many car insurance companies offer something called 'First Accident Forgiveness', which means that the first accident you get into will not adversely affect your insurance premiums. So an accident doesn't necessarily result in an increase in insurance rates.
Myth 8:Younger drivers always pay obscene interest rates.
Fact: Not necessarily. Many car insurance companies offer young drivers discounts for completing defensive driver's credits. Others give students below the age of 25 discounts for exceptional academic performance. Students can also get discounts by installing air-bags and anti theft devices. By availing of these discounts, a student driver can definitely enjoy affordable insurance rates.
Myth 9:Car insurance covers the costs of items stolen from my car.
Fact: Generally, personal possessions left in the car are not covered by car insurance. Some home insurance policies cover such items, but that varies from item to item and policy to policy.
Myth 10: If I get into an accident and the other party is at fault but has no insurance, my insurance company will pay for my damages.
Fact: Not necessarily. If you have sufficient Collision coverage or Uninsured Motorists coverage then the damages to your car and person will be covered. But you're on your own if you don't. This is why some states require that all drivers carry Uninsured Motorist's coverage.
So what have we learnt today (besides the fact that we can crack our knuckles all we want)? We've learned that a statement doesn't become true just because many people repeat it. All of the above statements have led people to make bad insurance decisions. So save your friends and family some hard-earned cash and spread the word about these auto insurance myths!
