Debunking The Five Most Common Myths When You Need Auto Insurance

Most stolen Car in the U.S.

All car owners need auto insurance because it is mandatory. However many insurance policies are very complex and with so many wrong information all around, it is much more difficult to distinguish facts from fiction. Confusion may eventually lead to expensive mistakes. This is the reason why CarInsurance180 helps shoppers who need auto insurance make informed decision. From rates for car insurance to premium, read some of the most common car insurance myths, debunked:

Myth Number 1: The most expensive cars to insure are red cars.

Debunked: This is a myth that has been around for a long time. Fortunately, this is exactly what it is, just a myth. Colour never played a part in determining the rates for car insurance. However, recent studies show that roughly around 25% of drivers believe that the colour of their car is a factor in determining their car insurance rates. It is widely believed that red cars mean higher insurance rates. The reality is, all insurance companies will not even ask about the colour of the vehicle you want insured when calculating quotes. They are likely to ask the car model, the body type, engine size and the age of your car.

Myth Number 2: New cars are likely to be stolen

Debunked: The truth is, it is the other way around. According to the National Insurance Crime Bureau, the top ten most stolen vehicles of 2008 were:

1. Honda Civic (1995)
2. Honda Accord (1991)
3. Toyota Camry (1989)
4. Ford F-150 (1997)
5. Chevrolet C/K 1500 (1994)
6. Acura Integra (1994)
7. Dodge Ram Pickup (2004)
8. Nissan Sentra (1994)
9. Toyota Pickup (1988)
10. Toyota Corolla (2007)

The reason why most car thieves prefer older vehicles are that they are easier to steal compared to newer cars. Additionally, since most car owners are keeping their cars longer because of the unstable economy, the market for used car became popular. Most of the time, when older car models are stolen; they will not make it back on the streets in one piece.

Myth Number 3: Bare bones car insurance can provide coverage for stolen, vandalized or cars damaged by hail or fire.

Debunked: The minimum requirements for auto insurance in most states only require car owners to buy liability coverage. This means that you are only covered for the damages you inflict to other people. Unless you have comprehensive coverage, you are not fully protected from other occurrences.

Myth Number 4: Car insurance companies will pay off the policyholder’s loan or lease once a car is totaled.

Insurance company coverage: cash value, not the car loan

Debunked: Most car insurance companies do not promise to pay off its customers’ loans once the insured car is totalled. They will, however, pay for the actual cash value of the car except for the deductibles. Any amount outstanding on the loan or car lease is the sole responsibility of the policyholder, not the insurance company. On the other hand, if you purchased gap coverage, you may be able to save yourself some grief. Gap coverage provides coverage to a policyholder once the insured car is wrecked before the loan is paid off when the accident occurred or before the term of the lease expires.

Myth Number 5: Sports car drivers get more violations; therefore, they pay higher premiums.

Debunked: This is not necessarily true. In fact, survey shows that in 2009, people who drove Hummers H2/H3 have five times the number of violations than the average car owners. On the other hand, the most “well-behaved” vehicles are people who drove Jaguars XJ. While insurance providers do not base their rates on this study, the type of car you own and your driving history are important factors that they will consider.