Car Insurance Myths Busted: Separating Facts from Fiction

<p>Believing car insurance could be costing you hundreds of dollars? Read on to separate the facts from fiction and find out how it could help you save money.<br /><br />With so many different types of policy available, not to mention the hundreds of insurance companies competing for your business, car insurance can be confusing enough at the best of times.<br /><br />Further, separating facts from fiction to get the best deal becomes even more difficult when you take into account all the false stories about car insurance.<br /><br />Majority of the us believe simply because they have repeated over and over again down the years. For instance, you believe that red cars are more expensive to insure, right? Wrong! <br /><br />Do you think new cars more likely to get stolen and cost more to insure. No and not necessarily!<br /><br />Read on to see some of the biggest car insurance myths exposed and learn how to save money on your insurance premium.<br /><br />1. New Cars Cost Mor
e to Insure<br />At first glance, there's plenty of logic to this myth. New cars cost a lot of money, therefore they'll be expensive to insure. <br /><br />However, this isn't always the case. Recent research from price comparison a website moneysupermarket.com has found that depending on the driver's history, insurance for a brand new car is often cheaper than a five or ten year old version of the same vehicle. <br /><br />Newer models have top of the range security features installed, meaning that they are statistically less likely to be stolen, a fact that helps to bring insurance costs down. <br /><br />Older models also tend to be owned by younger or new drivers, who insurers class as a bigger risk and charge a higher premium. <br /><br />2. Car Color Matters<br />For some reason, a quarter of drivers think that car color plays a big part in calculating insurance costs, with many believing that red cars cost more because they're linked to aggressive driving. <br /><br /
>However, although insurers take many factors into account, including engine size, age and value of the car, driver's record etc., they don't take any notice of the color. In fact, they won't even ask you what color your car is.<br /><br />3. Being Loyal to Insurer leads to Cheaper Coverage<br />Staying with the same insurance company year on year won't automatically lower your premiums. <br /><br />It always pays to shop around for a better deal and compare car insurance quotes when it's time to renew your policy, because providers don't necessarily reward your loyalty with a reduced price.<br /><br />4. New Cars Are Stolen More<br />Some people avoid buying a brand new, top of the range car because they think it'll become a target for would be thieves.<br /><br />Statistics prove they are wrong. New models have much more advanced security equipment and anti-theft devices installed, meaning that criminals steer clear and target older vehicles that are easier to steal instea
d.<br /><br />5. A Car is Worth What You Paid for It<br />If your car is totaled or stolen, insurers will only pay to replace it with a similar model at today's market rate, not the value you paid for it originally. <br /><br />So even though you took a &lt;a rel="nofollow" onclick="javascript:_gaq.push(['_trackPageview', '/outgoing/article_exit_link/5069481']);" href="http://www.moneysupermarket.com/c/car-finance/"&gt;car finance loan'&lt;/a&gt; to buy that beautiful new sports car for $50,000 five years ago, unfortunately you won't get that amount as an insurance payout, just what it's worth now.<br /><br />6. A Speeding Ticket Will Send My Premium Spiraling<br />Although committing traffic violations and gaining points on your license are pretty much guaranteed ways to increase your insurance premiums, a first-time minor speeding offense is unlikely to make too much difference. <br /><br />However, a second or third ticket, or a major offense like going 20 miles per hour
over the limit, will lead to increased rates as your insurers will consider you a high risk driver.<br /><br />7. Credit Scores Don't Count<br />Sadly this isn't the case. Most insurers now factor in a customer's credit score when calculating their insurance quote. The better the credit score, the lower the premium will be. <br /><br />Boost your score by keeping on top of credit cards debts and paying bills on time, and you'll start to see a difference when you renew your auto insurance policy.<br /><br />8. No Fault Insurance Means It's Never My Fault<br />It'd be a much simpler world if this was true, but sadly it isn't! <br /><br />The only thing no fault insurance covers is your medical bills if you are in an accident, whoever is at fault. <br /><br />It doesn't cover the other driver, it doesn't cover damage to cars, and it certainly doesn't mean you're absolved of any responsibility if you are to blame.<br /><br />9. I've Never Been in a Crash So I Don't Need Insuranc
e<br />And finally, the biggest myth of the lot. Just because you've been lucky enough to avoid accidents so far doesn't mean that'll always be the case, no matter how good a driver you are. <br /><br />But it's not just the peace of mind that having motor insurance can provide if something were to go wrong. It's actually a legal requirement to have some form of insurance, so it's not an even an option, you must have some sort of protection.</p>
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