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Saturday, February 27, 2016

Debunking 5 car insurance myths

By Matt Rhoney

Car insurance is a requirement that may be a hassle to deal with, but will undoubtedly be a great help if you’re ever involved in a small fender bender or a serious car accident. Unfortunately, choosing the right car insurance can be tricky, particularly if you have some preconceived notions about some factors that may affect the price of your premium. Debunking some car insurance myths will help you understand your premium and overall insurance policy a little better.

Myth #1: The color of your car affects your car insurance

For years, red cars have been getting a bad rap. While thrill seeking and risky drivers may coincidentally drive red cars, your insurance premiums are based on the way you drive rather than the color of your vehicle. Additionally, according to Kelley Blue Book, it’s not the color of your car that increases the price, but rather the type of car you drive. The most expensive types of vehicles to insure include large SUVs and sport cars. So, if you want to drive a red car go for it, but make sure it’s a mid-size sedan with affordable insurance premiums.

Myth #2: Smaller cars are cheaper to insure

In theory, this would seem true, especially since mid-size sedans have some of the most affordable insurance premiums. Unfortunately, a smallcar can have an expensive premium since it depends on the type of coverage. For example, for collision and comprehensive coverage on a smaller car may be more expensive since smaller vehicles typically sustain more damage in an accident and are more like of being “totaled” in a collision.

Myth #3: “No fault insurance” describes an accident that is not the policy-holder’s fault

No-fault insurance means that your insurance company pays for any of your injury-related bills, despite who is actually at fault. Similarly, according to Marasco& Nesselbush, LLP, drivers who may be partially at fault for the accident may still be eligible for some post-accident compensation.

Myth #4: Older drivers are expensive to insure

As some drivers age, the quality of their driving may decrease (making them “riskier” drivers), but that’s not always the case. For many drivers, over the age of 55, insurance rates may decrease if the senior aged drivers successfully complete an defensive driving course. Some insurance companies may offer discounts that may add up to 10 percent for 3 years. Additionally, senior citizen drivers may get discounted rates if they drive less due to retirement or if no longer working full-time.

Myth #5: Your insurance coverage takes care of losses like vandalism or natural disasters

Many drivers with insurance assume that if they have car insurance all types of damages are covered. Unfortunately, car insurance doesn’t work that way. Liability insurance covers you if you hurt someone or damage their property, but comprehensive and collision coverage protects your vehicle (comprehensive and collision is optional coverage). If you are worried about vandalism or freak accidents involving a falling tree, you want to get comprehensive coverage. If you want to be covered for damage to your vehicle caused from a collision with another vehicle or object, you want to make sure you have collision coverage.

Images: 1. Axion23/Flickr, "Red Bugatti Veyron from Symbolic Motors; CC BY 2.0; 2. Morgan Shepherd, US-PD; 3. Justin1569, "A tornado approaching Elie, Manitoba", CC BY-SA 3.0