Car Insurance Myths Continue To Mystify Consumers

If consumers had a better understanding of car insurance, they might have better coverage and save a lot of money, too. Automobile insurance is not an item that many people ponder often, and due to this, a lot of insurance myths abound. For a lot of people, auto insurance is considered only when buying a new vehicle.

Below are several myths that people regularly misunderstand about car insurance:

Myth: Lower deductibles are better, so you will not need to "pay out" should an accident occur.

Fact: It makes much more sense to carry the highest deductible you can afford to pay, as you will save a lot of cash on your premiums. Many consumers are paying quite a bit of extra money in premiums for the benefit of having small deductibles. Do not pay extra in order to have a low deductible; it isn't a good value. Auto insurance is not intended to pay for every insignificant expense; it is designed to cover big expenses that would place a strain on your finances.

Myth: The color of a car determines the amount of the premium.

Fact: This myth has persisted for decades; the prevalent rumor is that red cars cost more to protect than those of other colors because that particular color is "sporty." This is just a rumor; the color of a car does not affect the amount of money you will pay to insure it.

Myth: You do not have a need for any more coverage than state law requires.

Fact: The minimum amount of liability coverage might not help you if you cause a wreck with a luxury car or if you cause substantial bodily harm to another party in an accident. You should consider carrying more insurance than the required minimum so that you might avoid a potential lawsuit.

Myth: Less expensive vehicles cost more to insure than more expensive models.

Fact: The main factor isn't the cost; it's this - how likely is it that a particular car will cost the insurance company cash in the form of a payout? The price of the vehicle has little to do with the cost of covering it. The insurance premiums are determined by a number of factors, including how much the vehicle will cost to repair and the likelihood of theft of the vehicle.

Myth: The government sets rates, so there is no reason to shop around for the best price.

Fact: The United States government has no influence as to how pricing is established. The states do have some say in how pricing works in a particular state, but the figures are just guidelines. Consumers can save money by comparing companies for the best price, and wise shoppers will do so.

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