There is a lot of information and understanding about auto insurance out there; some are considered essential realities while others, on closer inspection, reveal deep-rooted misunderstandings. The difficulty with insurance misconceptions, however, is that they can harm us or influence the choices we make, which is why it’s time to turn those misconceptions into benefits.
- Red cars are more expensive to guarantee
This is not true. It is the make, model and year of your vehicle that will affect your insurance rate. The premium you pay, contrary to popular belief, does not take into account the color of the car. Instead, it’s the background of the vehicle’s claims and average repair costs – in addition to its appeal to thieves – that affect the price premium.
- If my car is taken, I will be protected
Not always. This is only real if you actually buy extensive insurance, which is optional coverage. Huge, if you have one, will spend on trouble (or loss) triggered by things like robbery, criminal damage, stoppage or hail.
- If I cause an accident, the problem with my car will be covered
Again, not always. Problems for your car may be covered, but only if you have purchased collision coverage, which is optional. Collision coverage will cost your vehicle trouble if it is determined that you are wholly or partly guilty of having actually triggered the collision.
- My commitment discount offsets any savings. I will definitely manage the change of insurance provider in the revival
This is most likely wrong. Changing insurance providers may cause you to give up your commitment discount (if you accept it) but that doesn’t mean you’ll pay more for your auto insurance. In fact, some insurance providers may provide a small discount on your premium if you have been with them for a long time, but the discount may not be significant compared to what other providers may offer. Besides, what’s so great about 5% off the $1,500 annual rate ($75 savings) if you can pay $1,200 with another company?
- Your car insurance coverage is guaranteed for the year
Again, wrong. If you browse through the middle policies and find a lower priced plan, you can terminate your plan before it is revived. However, doing so may imply that you will have to pay a termination fee. Because of this, you’ll want to make sure the savings are worth more than termination costs. Otherwise, it may be best to hold off until your plans for revival, at which point if you terminate, there are no fees or charges.
- Higher prices imply more coverage
Wrong again. The prices charged by various insurance providers to cover the same driver, with the same car, for the exact same coverage, can differ by hundreds or even thousands of rupiah. Each provider uses their claims experience to determine what costs are billed and each company will have a different overview of a person’s driving background and car mix. As a result, you’ll want to make sure you’re with the “right” insurance company; spend your prices, at a minimum, annually.
- No-fault insurance means “It’s not my fault”
Real? Wrong. There is always a designated fault in an accident. Whether it’s all aimed at one person or general will depend on the collision. No-fault insurance means that your insurance company pays for your problems. If you are responsible for the accident, then you will most likely see an increase in the price of your car insurance. On the other hand, if you are 100% innocent of the collision, your rates will likely not increase — even if your insurance provider covers the resulting costs.
- Men pay more than women for car insurance
This is also not true… to some degree. Men under 25 tend to pay much more than female drivers of the same age. However, once a driver turns 25, sex is usually no longer an important element.
- All car insurance providers charge you the same rate
Wrong. The prices that various auto insurance providers charge to cover the same car and driver for the same package can vary by hundreds or even thousands of dollars, so it’s a good idea to look around.
- If I have a ticket and an accident, I will continue to pay a lot for car insurance
This is not entirely real. While you may be paying more for insurance than someone who doesn’t have a ticket or accident, if you look around, you may be surprised to find other insurance companies that are more flexible than accident or periodic tickets. Also, tickets usually affect your insurance rate for 3 years and accidents for about 6 years. Have better today, and you’ll buy lower costs for the future.
- If a friend owns my car and causes an accident, it won’t show up on my insurance
Wrong. Insurance coverage is connected to the vehicle and not the individual driving it. Therefore, it is always best to remember that if you are giving your car to a friend, you are lending them your insurance as well.
- Your car insurance rates will increase if you look around
This is a common misconception. The truth is, your auto insurance rates won’t increase even if you’ve been looking around for better rates. You get absolutely nothing to lose, only money to save, by seeking your refuge.