Author: Peter Spyr Added: August 20, 2008
Who hasn't heard a myth or two when it comes to how the rates for car insurance premiums are determined? There is so much information to sort through when it comes to choosing car insurance coverage that it can be difficult to work out what is fact and what is fiction. Here are a list of some of the most common misconceptions about car insurance: No Accidents - No Insurance Needs There are some who believe just because they have never had an accident-free past, they do not need to be insured. Quite simply, any responsible driver, regardless of a clean sheet, should be properly insured against the unexpected. Otherwise, in the event of an accident, they can face huge liability issues and astronomical expenses, especially if the accident is their fault. Additionally, in many places, there is a legal requirement to have auto insurance coverage on any vehicle used on the road. Failure to do so and get caught can mean big fines and potential legal trouble. No Fault Insurance Means: I Didn't Do It No-Fault insurance coverage actually means that your insurance policy will cover the cost of damages from any accident, regardless of who was at fault. Credit Scores Do Not Influence Insurance Rates Most insurance companies rely on a credit history when it comes to determining premium rates. A good credit history indicates responsibility, whereas a person with poor credit is viewed as a higher risk when it comes to filing claims. No Comprehensive Insurance, No Problem Some people will hold only the most basic of insurance requirements to be "legal". However, without comprehensive insurance, our vehicle will not be covered in the event of fires, vandalism, deer accidents, or other incidents not related to a collision accident. Car Color Does Not Raise Rates It is not uncommon for people to have heard this rumor but the reality is the color of your car has not effect on your premium rate. Vehicle factors that do influence the cost of the premium are the make, engine size and model of the vehicle. Anyone Can Drive Your Car If you lend your car to a family member or friend not living in your household and they are involved in an accident, your insurance will be responsible for paying, even if you were not there. Many people wrongly assume the insurance company for the person driving the car would be the responsible party for paying damages. Personal Insurance Works for Business Too If you use your vehicle for any reason related to work, you need to modify your insurance policy so that it can include work-related coverage. If you own a business and your employees use their own cars for business travel, it would be wise to extend your business insurance by adding a non-owned car policy to protect yourself and your staff. Under 25 Years Old Pays the Most While it is true that some male drivers under the age of 25 will pay more than their female counterparts, in general averages both the young and old will pay the highest rates for insurance due to the statistics. Young drivers and senior drivers are most likely to be involved in road traffic incidents.
--- Don't leave it until you have an accident to find out that your car insurance doesn't include all the things you need. Get a car insurance quote from The Co-operative today.
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