Unveiling the truth behind common insurance myths


04Over 50% of the people who currently hold auto insurance policies have hardly taken a look at their policy terms and conditions. Lack of this knowledge not only puts you in soup when you are in a tight spot, but also prevents you from differentiating facts from myths. Most people purchase their policies without understanding the truth behind certain auto insurance myths plaguing America in recent times.

The most common myth making the rounds is that customers have to pay through their nose to get their red colored car insured. Dispelling this myth, Leah Hunger, Tidewater AAA’s director of Insurance Operation, says that the color of the car has nothing to do with the calculation of auto insurance premiums. There are many other factors that govern the calculation of auto insurance premiums and the color is definitely not one of them.

Most of the people also believe that they will have to pay higher insurance premiums as they get older. The truth is that age is the only factor that auto insurance provider consider. A mature driver with years of driving experience and a clear driving record can avail better rebates and discounts. Elderly drivers can also get auto insurance at low costs by taking up the refresher driving courses at regular intervals.

Unfortunately, most auto insurance policy holders are of the opinion that the credit score does not hamper the calculation of auto insurance premiums. This is one of the biggest myths that need to be dispelled at the earliest. The credit score not only curbs the ability of the person to avail loans, it also prevents that applicant from getting discounts on auto insurance policies.

If you are under the assumption that your auto insurance provider automatically offers coverage in case your car is damaged due to floods, fire or hail, here is a reality check. Hunger says that the insurance company covers damage due to natural calamities, vandalizing and theft only if the policy holder has collision or comprehensive coverage. For every other type of coverage, theft and damages are not covered.

A number of people feel that if their friend or family member borrows their uninsured car, the auto insurance coverage in that person’s name will suffice in case of any mishaps. This is not at all true.  According to Hunger, it is the vehicle that needs to have the insurance coverage and not just the person driving it. Think twice before offering your uninsured car to others either for personal or commercial use.