Auto Insurance Myths: Busted

Posted & filed under Advice & How-to, Car Insurance.

On the popular Discovery Channel television show MythBusters, two special effects experts (and their team of assistants) try to determine if famous legends are plausible (like diving under water to escape gunfire), or should be busted (like the idea of sliding down a ship’s sail using a cutlass) As a savvy car shopper, you know that every vehicle you own must be insured, and you also know that the kind of car or truck you drive has some impact on your insurance premium, but the world of auto insurance is full of myths and misconceptions. Here are six of the most common.

  1. The highest insurance rates are for men under the age of 25. Plausible, but inaccurate. While men under the age of twenty-five are likely to pay more for insurance than female drivers of the same age, the most expensive insurance rates are for newly-licensed young drivers (those between the ages of sixteen and twenty-two) and mature drivers (those who are over sixty-five) because those two age brackets are responsible for the greatest number of car accidents.
  2. Credit scores can affect insurance rates. Confirmed. While your credit score is not the only factor that determines your auto insurance premium, it is a factor, and if your credit is extremely poor, you may have to consider state-sponsored pool insurance. Watch those credit cards, pay your bills on time, and take steps to protect your identity, and you can help restore a score that has fallen.
  3. Collision coverage protects me from hail damage, pays for repairs if I hit a deer. Busted. Your collision insurance will protect you from accidents involving objects that you crash into, but in order to cover yourself against damages from animal accidents, wind, hail, fire, and acts of vandalism, you need comprehensive coverage, as well.
  4. A recently-paid premium covers a brand new car. Plausible, with caveats. While you will be covered if you have an accident as you’re driving your new car off the lot, you only have a limited amount of time – thirty days or less – to contact your insurance company and put the new car on your policy.
  5. A friend driving my car will be covered by their insurance, not mine. Busted. The responsibility for an accident goes with the car, not the driver, unless the car was stolen, so if you let a friend borrow your car, and they’re in an accident, it’s your insurance that will be used to cover any damages, and your insurance premium that may rise.
  6. Auto Insurance is necessary, even for people who have never had accidents. Confirmed. While some drivers are fortunate enough to go through their entire lives without ever being involved in a car accident, this is rare. Car insurance protects you from accidents that you cause, and also protects you if an uninsured motorist hits your car. As well, every state in the country requires some kind of minimum coverage in order to register your car, so having auto insurance isn’t just a good idea – it’s the law.

Shopping for auto insurance can be confusing, but if you know how to sort out fact and myth, you will be able to find comprehensive coverage that protects you without emptying your pockets.