Car Insurance Myth BustersJune 26, 2013
With all of the options, additions and various car insurance plans available in the market today, some myths are bound to be circulating. These myths cause confusion for consumers and can make it difficult to make an informed decision on the insurance coverage they need at the right price. The following are some of the most common myths associated with car insurance policies despite the fact they are not necessarily true. By getting the right facts, it will make your insurance shopping simple and straightforward.
You don’t need Comprehensive and Collision Coverage
While both comprehensive and collision coverage are considered to be optional, the truth is they are not optional for everyone. If your vehicle is leased or loaned, your lender will most likely require that you carry both of these options in order to protect their investment in your car. This means that for the duration that you are paying for the vehicle, you will be required to carry both comprehensive and collision options. Your lender may also require a limit on how high the deductible should be so they are assured that you will be able to pay it in the case of an at-fault accident or theft.
Traffic Tickets Increase Your Rates
It is true that many traffic violations will have an impact on your insurance rates; however not every ticket will directly affect your insurance premium. An example of this would be parking tickets. They do not impact your policy. In cases of other traffic violations, ultimately it is up to the insurance company you are with to determine if your premiums will increase. Violations such as speeding, running red lights, and careless driving are more than likely to impact you negatively.
Cheap Premiums are the Way to Go
We are all looking for the best car insurance rates as it is quite the annual expense. It does not mean you are getting the best deal by receiving the lowest rate. Some policies can afford to undercut others because they have less coverage, lower limits, and fewer options. On the surface it seems appealing, but it may not necessarily be the best value. To truly have the best deal on your car insurance policy is to have one that provides you with all the coverage you need at a price you can afford. Compare car insurance quotes online before purchasing a policy.
A New Insurance Company Won’t Charge For a Previous Accident
While a previous policy you carried may have had an accident forgiveness option, a new company may still charge you for having the incident in on your record. While changing insurance companies can save you money, it may not necessarily help you avoid paying an increase because of an accident you were found at-fault in the past.
Insurance Will Pay to Replace a Car that is Written Off
While insurance does provide a payout for a car that is considered to be a write-off, it may not be the amount you owe on the vehicle or the amount you would need to replace it. This is because cars depreciate and with time their value fades. Most likely in this circumstance, your car insurance policy will not pay off a car loan if it is more than the calculated value of the car. A good option if you are purchasing a new vehicle is to add a “Waiver of Depreciation” option to your policy. This will cover your vehicle for two years of extended coverage that guarantees the insurance company to replace it with a new car.
Don’t let common myths leave you uninformed and in a potential situation that can hurt you financially. Getting the facts on policies is easy to obtain. Know what you are signing up for with your car insurance company so there are no surprises.