I am sure you have heard scary stories about people purchasing cheap insurance rates and later on found out that the promised protection was almost useless. They end up either selling all their properties or facing legal battles just because of one accident. The truth is, many of these myths are simply not true and their only purpose is to divert the attention of the policyholders to purchase the products that these people are promoting themselves.
You get a high premium rate if your vehicle is red or yellow
This is probably the funniest insurance myth that I have ever come across. This thing is so pervasive that many people have actually believed in it. In reality, insurance prices have nothing to do with the color of your vehicle. If you like, you can test yourself, and buy a sedan car and have it painted with yellow color. You might be surprised but you will still get the cheapest insurance rates, as you have always been, because insurers do not care about how your car is painted. We could only speculate that the myth is because most sports cars are painted with either red or yellow, which is probably the reason why people associate them with their costly premiums. if you are still in doubt, contact your insurance agent and very quickly ask if the car’s color has something to do with the insurance rates.
General insurance coverage to protect you from thieves
This is yet another myth that we would like to dispel. Keep in mind that only comprehensive car coverage is able to protect you from thieves. Unfortunately, because of the high cost of comprehensive car policy, most people resort to choose policies that are limited in terms of coverage, which do not include the coverage against theft.
Paying your deductible only after your car is totaled
If I am not mistaken, we have already discussed this in the past, many times already. But I would like to reiterate this once again for the benefit of those who were not able to follow our discussion. So, when you purchase a new vehicle, the insurance company will evaluate the car’s value to determine your premium rates. But do keep in mind, that your car’s value depreciate the moment you get out from the dealer’s parking lot. This means that if you loaned the vehicle for $30,000, the insurance company will not recognize that amount but use their computation. In short, the value of the car is less than the loaned amount. This puts you on a hot seat because insurance companies will not pay the car’s amount based on what you owe. If this idea concerns you, what you need to do is to protect yourself by using GAP insurance. This policy will take that difference and will pay the amount you owe if you had an accident. However, like most policies, you are going to pay for additional costs.
Getting coverage for a rental vehicle in the event of an accident
Yes, you are going to receive the payment, assuming that you have purchased a rider policy specifically for rental vehicles. Most cheap insurance coverage, however, does not default on this type of policy as it adds additional cost and must be requested deliberately.
Existing auto insurance policy covers rental cars as well
In theory, your auto insurance policy should cover rental cars. However, you may have to check this with your insurance agent if you have not waived this option during your insurance purchase. It is also possible that in an attempt to reduce the cost of your premiums, your insurer will have deliberately excluded this option for the said purpose.
