Top Ten Car Insurance Myths That will turn into expensive mistakes
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Added: 31-01-12
- To be able to find the cheapest car insurance you need to understand what the insurance companies are looking for in a good driver. If you believe that every person pays the same car insurance premiums think again. This is a myth. Car insurance rates are determined by a lot of factors and usually, these are statistically based risk. For example, an individual with a higher risk would need to pay higher rates because of the risk associated to them individually. Let me elaborate on these risk factors:
As the hayfever season gets underway a number of car insurance rates women could be risking the need to claim off their car insurance policies and all because of a sneeze. According the
2. Gender - women usually drive safer compared to most men. Even so, with more and more women getting hold of the steering wheel, these facts are beginning to change.
3. Marital Status - regardless of driving history, married people would still pay less car insurance premiums compared to single people.
3. "I got a ticket and my insurance premium will probably triple!"
Some areas that have seen the biggest growth in suspicious claims this year include Newcastle, Peterborough, Preston and Chester which are all now rated as 'fraud blackspots'. In fact the fraud epidemic across the UK is only growing and shows that fraud is no longer restricted to the heavily built-up areas in towns and cities.
2. Driving Violations - the more tickets you have under your vehicle dash, the higher insurance premiums you need to pay. Whenever you apply for a car insurance premium, your insurer would penalize you for your bad driving history but do not worry too much. Since you improve your driving history as time passes, your insurance rate is very likely to get cheaper also.
The cost of your car insurance policy is based on your age, sex, zip code, driving history, coverage type, make, model, engine size, the car's safety record and the likelihood of it being car insurance rates stolen.
4. Accident Claims - certainly, when you have more car accident claims under your belt, then you're more likely to pay higher insurance compared to those who've clean records.
Some insurance companies take a drivers' credit history into account when configuring the car insurance quote. If you have a low credit score, it is more likely that you will stop making payments on your insurance. However, once your credit score is factored in, most people end up with a lower rate
Last but not least, keep a box of tissues handy in your car to prevent a runny nose. You never know who might be parked by your side at the next set of traffic lights!
Each state has set the required minimum level of insurance coverage, here in California it is $15,000 per person injured, a maximum of $30,000 per accident and $5,000 property damage liability. These limits are very low. Emergency medical services are very expensive and $5,000 worth of damage can be exhausted in a very minor fender bender between two relatively new vehicles. It is a serious mistake to maintain these low coverage levels. You could face a serious financial collapse if you find yourself paying out for medical bills and property damage as a result of being under-insured. Being under-insured could make you vulnerable if another driver decides to sue after an accident.
7. "Insurance companies make up their prices and charge whatever they want."
Insurance companies are required to describe how the rates are calculated and then the rates must be filed for review and for approval or rejection. Any increases or decreases must be filed through the state of California department of Insurance for a review and then the rate is accepted or rejected.
8. "My insurance covers any car I drive."
Some insurance polices, called broad coverage policies, transfer coverage to a vehicle that is made available to you on an incidental basis. Every policy is different. Some companies only transfer the minimum state liability requirements while others are a true broad coverage policy that transfers your specific liability limits. However, many insurance policies are restricted policies or named-operator insurance policies that only cover car insurance rates the named drivers, everyone else is automatically excluded and coverage is not afforded.
9. "If my car is stolen, my insurance company will pay off the loan."
If you bought GAP Insurance when you bought your vehicle, this is true. However, if you have comprehensive insurance and your car is stolen or totaled in an accident, the insurance company will establish the fair market value of your pre-accident vehicle and pay you the actual cash value. This estimation excludes finance charges, interest rates, licensing fees, taxes and other charges you may have accrued throughout the lifetime of your loan.
10. "My insurance company will pay for my car rental."
Your insurance company will not pay for your car rental unless you have purchased car rental expense. This coverage is typically sold only in conjunction with comprehensive and collision coverage.
It is important to read and understand your insurance policy. It is also important to ask questions and address your concerns to your agent.
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