The Facts and Myths about Car Insurance
Car insurance can be complicated and confusing for a lot of vehicle owners. We hear a lot of stories from customers about what they’ve been told by their insurance companies, information relayed from friends and relatives, and — of course — the internet.
Many of the “facts” we hear are simply untrue — complete myths that have no basis in reality whatsoever. Below are four of the most common myths we hear being presented as facts:
1) The color of a car affects insurance rates
Absolute myth! Somewhere along the way people got this crazy idea that cars or specific colors were targeted more often for speeding and the like, which thus raised insurance rates on those colored cars.
That is not true at all. The myth probably got started because sports cars are typically seen in red and yellow, and thus people assumed those colors were more at risk and thus had higher rates. The fact of the matter is that sports cars have higher rates, but the color has nothing to do with it.
2) All new cars are automatically added to the insurance that is already in a persons name
Myth! Car insurance companies do not have a crystal ball so you will need to inform them when you purchase a new car.
In some states, like New York, a car can not be registered without insurance, but the owner of the car and insurance must still call the company to get the car insured.
3) Males under 25 pay more for car insurance, no matter what!
Technically this is a myth with some truth behind it. Males in the under 25 bracket have a tendency to be more dangerous drivers, so insurance rates can be higher.
However, the group as a whole does not penalize the individual driver. A driver with insurance for several years and a clean record will pay less than someone without an insurance record or with a blemished record, period. It depends on the person, not only the age.
There is some truth to this, but its not an insurers rule to charge more, each person is considered on an individual basis.
4) Minimum coverage is good enough and will cover theft or other issues.
This a a big myth and a costly one at that. Minimum coverage only covers accidents while driving, it does not cover theft, vandalism or acts of god.
In order to be safeguarded against theft, vandalism, or a random falling — tree full coverage is necessary. Even then it is necessary to read through the contract to see what is and is not covered