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- Auto insurance is an important thing to have, no matter the age or condition of your vehicle.
- It is important to understand what goes into determining car insurance rates and how these policies work.
- Don’t assume that a safer car will cost less to insure, that a red car will cost more, or that you won’t have to pay your deductible if another driver is found guilty in an accident.
If you own a car, you will need to factor the cost of car insurance into your budget. But how much you pay for coverage and how much you pay under your policy will depend on different factors.
Now, there’s a lot of misinformation out there when it comes to auto insurance. But subscribing to it could mean underestimating your costs and running into problems as a result. With that in mind, here are some auto insurance myths you really shouldn’t believe.
1. A car with extra security features will be cheaper to insure
Many newer cars these days are equipped with safety features designed to help drivers avoid accidents and stay focused. Some cars, for example, have lane departure warnings, where your car will beep if you veer into another lane. Others have brake warnings that will sound if your vehicle senses you are getting too close to another on the road. And many vehicles have backup cameras that make it easier to park and reverse without accidentally hitting another car.
These features can be useful on their own. But believe it or not, they won’t automatically lower auto insurance premiums. The reason? Safety devices like these can also be expensive to repair. And that can be reflected in your auto insurance premium rates.
2. Your credit score doesn’t come into play when you buy car insurance
It makes sense that your credit score would be a factor in your ability to get a competitive rate on a mortgage or personal loan, since you’re asking to borrow money. But when you apply for auto insurance, you don’t ask for a lump sum cash, you get coverage for your vehicle. As such, you would think your credit score would not impact your premium rates. But you would be wrong.
Your credit score is an indication of how well you manage your bills. As such, insurance companies will often use it to determine how well you will handle your vehicle, although the two are not necessarily related.
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3. The color of your car matters
You will often hear that red cars are more expensive to insure than cars with a more discreet finish. It’s really not true. Although a red car may stand out more on a pavement than a white or gray vehicle, ultimately the type of car you own and your driving history will have more of an impact on how your premiums look. car insurance.
4. You will not be responsible for your deductible if another party is responsible for an accident
Let’s say your car is parked in a legitimate place and another car is driving at you. Obviously, in this scenario, you are not at fault. But that doesn’t mean you won’t have to pay your deductible when repairing your vehicle.
What will often happen in this scenario is that you will pay your deductible, your insurance company will seek reimbursement from the insurance company of the person who hit your car, and then your deductible will be refunded to you. But it can take a while, so it’s a good idea to keep some money in savings in case you have to shell out money for an initial deductible.
Car insurance can be a big expense, so it’s important to know how it works and what goes into your premiums. And that means avoiding these potentially dangerous myths.
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