The insurance industry is surrounded by many myths, and perhaps one particular insurance type plagued by myths is auto insurance. I have heard many unusual questions about auto insurance but there are just some that are so recurrent and so I think it is just proper to call them myths.
One of the things I hear is people talking about how they have never been involved in any car or vehicular accident and therefore they actually don’t need auto insurance. They couldn’t have been more wrong! Aside from the fact that it is required by the Department of Motor Vehicles when you register your car, car accidents can not be predicted by patterns or historical data. Just because you have been driving for ten years without any record doesn’t mean you will go another ten just as smoothly. Of course, this is what we want for everybody, but accidents can happen to anyone, at anytime, and auto insurance is the best protection you can have to protect your self, your fellow driver, your vehicle and your family as well, from any financial burden you may encounter due to a vehicular accident. If you have not been in any incident before, be thankful that you have been so lucky so far, and ask that you’ll be given the same luck in the future. But like I said, auto insurance will be the best protection for everybody.
The other myth I often hear is that credit rating has got nothing to do with auto insurance – wrong again! In fact, one of the items looked at in calculating your auto insurance premium is your credit reports and credit standing. There is a belief among insurance companies that good creditors are relatively lower risks than bad creditors, or that perhaps they are more responsible drivers. This in itself may be another myth, but it is nevertheless one subscribed to by most insurance companies.
You might also be led to believe that your personal auto insurance covers both personal and business use of your car – this is again, another myth. Auto insurance companies can pronounce some incidents as reason for no-claim, or deduction of some amount from what you can claim from them and if they discover that the car is actually used for activities other than personal, then you run the risk of not being able to claim the full amount due you or worse, forfeit your claim at all.
One other myth I have heard quite often is that males who are under twenty-five years of age pay higher premiums than women drivers. While it may be true that males twenty-five years old and younger can potentially pay for higher premiums than women of the same age, teenage drivers and older drivers almost inevitably end up paying more than any age or gender band, because of the high risk they represent. Teenagers for their image of being reckless and irresponsible, and older drivers because of (probably) poorer eyesight and other physical limitations
But the one myth that never fails to make me smile whenever I hear it is one about the vehicle color. Sometimes the color is red, or black, or sometimes even yellow or pink, but the myth is always the same. They say that red (or black, or any other color, I just chose red because it is my personal favorite) cars command for higher auto insurance premiums than cars on the other slices in the color wheel. This is probably some myth fabricated by some paint company, wanting their paints to be associated with luxury and style. But the truth of the matter is, colors don’t matter when your vehicle and you are being assessed by auto insurance companies. What matters are your personal driving record and credit standing, and the car’s engine, make and model. It is important, therefore that you keep your records in pristine condition so you don’t end up paying higher premiums.