Misinformation, rumor, hearsay. There’s some in every industry, though the detailed and sometimes complex nature of auto insurance makes it particularly prone to misconceptions. In a recent article posted by Yahoo.com they reported Eight Common Auto Insurance Myths… Below are five of the most important, to view the full article visit Yahoo.com or click here.
Myth 1: Older cars always cost less to insure
The truth: Not necessarily. While the age of your vehicle may influence your rate in certain cases, insurers look at many aspects of your car. “Typically an older car will probably be less costly, however, it depends on the car,” says Loretta Worters, vice president of the Insurance Information Institute. “Rates are based on not just the age of the car, but how popular they are with thieves, difficult to get parts, cost of the parts, etc.”
Myth 2: Red cars cost more to insure
The truth: The color of your car makes no difference to insurers, according to the Oklahoma Department of Insurance. The majority of insurers care only about the make, model, and miles on your vehicle, not the hue. So go ahead and paint it like a candy cane or a football, your insurance rate shouldn’t budge.
Myth 3: Cheaper insurance is always better
The truth: Being too frugal when selecting an auto insurance policy may cost you more in the event of an accident. According to a press release from the III, “In today’s litigious society, buying only the minimum amount of liability insurance means you are likely to pay more out-of-pocket for losses incurred after an accident and those costs may be steep.” Liability insurance refers to insurance that protects you if your vehicle does damage to something or someone else.
Myth 4: Bad credit won’t affect auto insurance rates
The truth: It’s true, in most states, bad credit can hurt. According to the III, insurance companies frequently create their own scores based on your credit history this is called a credit-based insurance score, to determine your car insurance rate. These scores are used when you buy, renew, or alter your auto insurance, as credit-based insurance scores are interpreted as a direct reflection of your fiscal responsibility. If you don’t have good credit, your rates will likely be affected.
Myth 5: Older drivers always pay more
The truth: Though age can be one of the major determinants of the regular rate (or “premium”) you pay for coverage, according to the National Association of Insurance Commissioners, being older doesn’t necessarily mean paying more.
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