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Befuddled Auto Insurance Lies

I’m sure you’ve heard a few absolutely crazy auto insurance rumors.

I can’t count the number of times I’ve had someone come into the office, with some tall tale, compliments of the uninformed insurance rumor mill. Often I’m laughing inside and can’t help but smile just a little thinking about it.

So I’m going to help save you from getting fished in and educate you a little bit in the process, by de-bunking a few of these auto insurance myths for you.

  • Having a red car means higher rates than a white one. It does not matter if your car is painted rainbow, the color does not affect your rates. They are dependent on your driving history, vehicle engine size, make, model and year, along with your credit rating.
  • You don’t need auto insurance if you haven’t had an accident. Yikes! This one is just plain dangerous. In most states it’s the law to have auto insurance if you own a vehicle. It’s absolutely insane not to protect yourself. On a positive note, if you haven’t had any accidents chances are your car insurance will be very affordable. Try and keep it that way.
  • I have no fault insurance, so an accident isn’t my fault. Wow…this one can be an eye opener for some. No-fault insurance means the insurer pays for the damages as a result of the accident regardless of who was at fault.
  • If my friend driving my car and has an accident, their insurance will pay for it. This one couldn’t be further from the truth. It was your car in the accident and it is your insurer that pays for the damages. Chances are you will also be on record because it’s your vehicle and you could still see an increase in your premiums.
  • It’s the government that sets the auto insurance rates. Nope, guess again! Fact is the insurance department in you state only sets the maximums the insurance industry can charge. It’s up to your individual insurance company to decide the rate you’re going to pay. Of course this is largely dependent on your driving record, marital status, car you drive and where you live (you may want to check some auto insurance quotes from different providers)

You may be laughing at of few of these or maybe even be turning a shade or two red with embarrassment.

Regardless, it’s important that you understand just how the insurance process works, so that you can make sure you get the coverage you need and for all the ‘right’ reasons.

June 17, 2011

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