Get Acquainted with 6 Major Car Insurance Myths

by on October 28, 2010

To get your car insured, be informed adequately and don’t let misconceptions come in the way. To avoid misrepresented facts and taking an expensive decision, right information is required for choosing right insurance policy. Be aware of the car insurance myths that could misguide you. So, here are six major car myths to raise your awareness:

Thieves mostly steal new cars

This assumption is not at all true that thieves steal new cars. Even the statistics show that older cars are stolen more, as they are easy to steal; they possess parts, which have a good market value and owners keeping them for longer time thus, increasing their tendency to get stolen. Also, as per insurance bureau, thieves’ preferences to steal cars vary from region to region. If your older car is not insured, then you would get no benefit in the case if it gets stolen.

Sports cars pay higher insurance premiums and their drivers receive more tickets

It is a flawed myth. A study released by the Quality Planning in 2009 revealed that most of the driving related breaches were made by drivers of Hummer H2/H3. The drivers of Hummer made five times more violations than the average figure. The position in the top ten chart was also captured by three Scion models – tC, XB Station, XA. So, the assumption is not true that insurance premiums are paid higher on sports car.

Car insurance covers total loan or lease amount of vehicle

It is wrong to assume that the car insurance pay the whole amount, when the car is totaled. No insurance can commit the same. What car insurance pays actually is the leftover amount when deductibles are taken out from car’s actual worth. Actual cash value is determined on the basis of car’s value prior to accident or factoring in depreciation. For the outstanding amount on loan or lease, the car owner is liable to pay. In order to bridge discrepancy between car’s cash value and the loan or lease amount, one can purchase gap insurance.

In an incident of theft or damage to rental car, the insurance company is liable

Car insurance coverage doesn’t provide insurance to rental car, even if you have bought comprehensive or collision coverage. The compensation for the rental car is not contained in the insurance policy, but could be added to the policy at a reasonable cost. Most of the insurers provide rental compensation to the tune of $1 to $2 a month. Even if one has included rental car in the car insurance, there is a limit on the amount reimbursed per day for the damages.

Insurance of red cars cost the highest

A number of drivers believe that the insurance for the red coloured car is quite expensive. But, the fact is insurers do not even bother as what is the colour of the car of the client. What insurers bother about are model, type of body, year, engine size, designing and age of the car.

Car damaged by hail or fire or stealing of cars covered by car insurance

All kind of damages are covered only if one has purchased both comprehensive and collision insurance policies. Stand-alone car insurance would not suffice. Comprehensive coverage protects against damages caused due to hail, fire, vandalism and accidents and damaged caused by animals. The collision coverage reimburses for car accidents.

(photo courtesy: Getty Images)

{ 1 comment… read it below or add one }

Donald Quixote August 28, 2013 at 11:20 am

Good stuff to know…I have to admit I did believe in two myths…the red car and the sports cars requiring greater insurance from companies.

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