Debunking common insurance myths

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shutterstock_62692660Consumers might be able to save a lot of money as they get to know the real facts about auto insurance from the Insurance Information Institute.  The institute has debunked some of the myths about auto insurance, the coverage, and the costs.  There are a good number of factors that might hike up your insurance costs.  However, none of these facts mentioned below will ever increase auto insurance costs or coverage.  They are:

Color of the vehicle – the color of the vehicle really does not matter at all.  It could be race car red or grandma beige – it is not going to make a difference with the insurance costs.  The insurers are keen on knowing where you live, if you have had any accidents, and the miles driven by you annually.

Age of the driver – this is also irrelevant and the age of the driver does not increase the auto insurance costs.  In fact, those over the age of 55 can actually qualify for certain discounts.

Credit rating – there is absolutely no impact on your insurance rates due to your credit rating, but the credit-based insurance score really does matter.  Most of the auto insurance companies will take this score into consideration when you purchase, renew, or change your auto insurance coverage.

Militaryservice – those who are in the service or the soldiers do not have to pay more than their civilian counterparts.  In fact, all these branches actually qualify for discounts.

According to the Insurance Information Institute there is a common misconception among people with regard to some of the factors of auto insurance.

Fire, storm, vandalism – if a vehicle has to be protected against all types of damage then the vehicle must have comprehensive and collision coverage.  However, if the worth of the vehicle itself is less than $1,000 then both these covers might prove to be useless.

Minimum coverage – the minimum coverage prescribed by the state might not be sufficient as the accidents generally cost more than the minimum coverage amount.  Consumer groups and the insurance providers recommend $100,000 for bodily injury protection per individual, and $300,000 per accident.

Another driver – if the vehicle is driven by another person other than you, don’t depend on the insurance cover of that person in case they get involved in an accident.  In most of the states the insurance company of that particular vehicle will have to pay for damages.

Vehicle usage – if the vehicle is not just for personal use, then avail a business-oriented auto insurance cover even if it costs a bit more.