Top Ten Myths About Auto Insurance

There are many myths about insurance. Here I will cover the 10 most common myths that can turn into costly mistakes. Clarify the facts. Right here.

1. “My friend told me that I can use my car in my second job delivering pizza and that my insurance policy will cover an accident.”
Well, your friend is wrong. Unless you have purchased a commercial auto policy, your personal auto policy specifically excludes coverage as long as the covered vehicle is used for business or commercial purposes.

2. “If someone breaks into my car and steals my laptop, my car insurance will pay for it because I bought full coverage insurance.”
There is no full coverage, which means that everything is covered. Your auto insurance policy is very specific about the limits and coverage it offers, there is no one insurance policy that covers everything. Therefore, if your car laptop is stolen, you must file a claim through your renters insurance or homeowners insurance policy and you will have to pay the deductible.

3. “I received a ticket and my insurance premium will probably triple!”
Wrong. With a ticket on your driving record, you will still qualify for the Good Driver discount, depending on the type of ticket you have. However, insurance companies also have internal point systems to configure the risk created by a ticket.

4. “My car color is red and I heard this will make my pay higher!”
The cost of your auto insurance policy is based on your age, gender, zip code, driving history, type of coverage, make, model, engine size, safety history of the car, and the likelihood of it being stolen.

5. “My credit history has nothing to do with my auto insurance rate.”
Some insurance companies take drivers’ credit history into account when setting up the auto insurance quote. If you have a low credit score, you are more likely to stop making your insurance payments. However, once your credit score is taken into account, most people end up with a lower rate.

6. “I only need the minimum coverage.”
Each state has established the minimum required level of insurance coverage, here in California it is $ 15,000 per person injured, a maximum of $ 30,000 per accident and $ 5,000 of liability for property damage. These limits are very low. Emergency medical services are very expensive and damages worth $ 5,000 can be exhausted in a minor collision between two relatively new vehicles. It is a serious mistake to maintain these low levels of coverage. You could face a serious financial meltdown if you find yourself paying for medical bills and property damage as a result of underinsurance. Having insufficient insurance could make you vulnerable if another driver decides to file a claim after an accident.

7. “Insurance companies make their prices and charge what they want.”
Insurance companies must describe how rates are calculated and then rates must be submitted for review and approval or denial. Any increase or decrease must be submitted through the California Department of Insurance for review and then the rate is accepted or rejected.

8. “My insurance covers any automobile I drive.”
Some insurance policies, called comprehensive coverage policies, transfer coverage to a vehicle that is made available to you incidentally. Every policy is different. Some companies only transfer the minimum state liability requirements, while others are a true comprehensive coverage policy that transfers your specific liability limits. However, many insurance policies are restricted policies or designated operator insurance policies that only cover named drivers, all others are automatically excluded and no coverage is offered.

9. “If my car is stolen, my insurance company will cancel the loan.”
If you bought GAP insurance when you bought your vehicle, this is true. However, if you have comprehensive insurance and your car is stolen or totaled in an accident, the insurance company will establish the fair market value of your pre-accident vehicle and pay you the actual cash value. This estimate excludes finance charges, interest rates, license fees, taxes, and other charges that may have increased over the life of your loan.

10. “My insurance company will pay for my car rental.”
Your insurance company will not pay for your car rental unless you have purchased the car rental expenses. This coverage is generally sold only in conjunction with comprehensive and collision coverage.
It is important to read and understand your insurance policy. It is also important to ask questions and direct your concerns to your agent.

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