Car Insurance Myths …Busted!

Recently a study came out regarding auto insurance and what people think determines premiums. The Progressive Insurance study showed a remarkable number of Americans have beliefs that range from the color of their car impacting their auto insurance to insurance companies being able to raise premiums on a whim. Take a look at what people think, and learn to bust those myths about auto insurance premiums.

First, there is the idea that your auto insurance premium is based on the color of your car. The study showed that 44 percent of young people believe that a red car will increase their premiums, while only 23 percent of older drivers believe color matters. Be assured, color does not matter when it comes to your auto insurance premium. You can drive whatever color car you want, it is the make and model that influences premiums more. The more powerful the car, the more expensive your premium will be.

Another myth is that car insurance companies are unregulated and can charge whatever they want. While 57 percent of females and 51 percent of males in the study believe that insurance companies are unregulated, there are state regulating agencies that keep watch over insurance companies. They keep track of the rates companies charge and there are laws and regulations about why insurance companies can raise premiums.

When it comes to fuel efficiency only 17 percent of the drivers interviewed know that it actually does factor into auto insurance premiums. Also, 28 percent of the respondents did not know that the weight of their car factors into the car insurance premium. However, 63 percent of drivers believe that new cars are always more expensive to insure than older cars. This is a myth. Many times your premium may not be higher for a new car.

Understanding comprehensive coverage was also difficult for 48 percent of those interviewed in the study, as many of them though that because it was called “comprehensive” that it covered them in any situation. Comprehensive coverage provides protection if your auto is damaged by something other than a collision – like fire, theft, or vandalism. This type of coverage does not protect you in an automobile accident.

Plus, one third of the respondents did not know that reimbursement coverage pays for a rental car if the owner’s car is being repaired after an accident. Most of them thought the insurance covered a rental car when they were on vacation or provided for a rental car if their personal auto was in for regular repairs. Some even believed that it paid for the other driver’s rental car if the insured is found to be at fault for the damage.

Getting through all of the auto insurance information out there is difficult, and the myths passed on from person to person just makes things more confusing. Don’t be a victim of myths. Make sure you do your research and look into educating yourself about auto insurance before you buy so that you are not like the respondents in this study. Look into anything that sounds funny to you. Discuss it with your broker, check out the articles on insurance websites and learn the truth to bust those auto insurance myths wide open.

Car Insurance Myths …Busted!

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