Top 10 Myths About Car Insurance: Dispel Your Notions

Myths…urban legends…they exist in reference to almost anything. Things that may seem like common knowledge can actually turn out to be mystical. What do you have yourself believing in terms of car insurance? You’d be surprised at how many things you think are car insurance “facts” are actually false notions. Here are the 10 most “popular” myths about auto insurance:

1. If you’ve never been in an accident, you don’t need car insurance.
   No one is invincible; don’t make the mistake of thinking you can forever avoid an accident. Even if you are the perfect driver, not everyone on the road is as smart.



2. Personal auto insurance covers your vehicle and a business vehicle
   Your personal auto policy probably doesn’t cover a business vehicle. Although some policies can extend to business vehicles, you must make sure to check with your insurance provider before making this assumption. You should look into this especially if you have any employees driving your business vehicle as well.



3. You don’t need comprehensive auto coverage
   Many people make the mistake of thinking that comprehensive coverage on a car is a “perk,” or a policy for the “rich.” This is most definitely not the case; comprehensive coverage protects from more than you may know. This coverage is what protects you from loss due to theft, storms, fire, etc.



4. Credit scores do not affect insurance rates
   This is absolutely not true. Not only does your credit score matter, but so does your “payment history.” In other words, whether or not you can manage your bills and make payments on time is something that insurance agents will take into consideration when forming your policies.



5. Males under the age of 25 pay the most on auto insurance
   This is both accurate and not. Males under the age of 25 do pay more than females under the age of 25, but in general, teenage drivers and senior citizens pay the MOST for auto coverage.



6. As long as you pay your current month’s premiums, your new car is automatically covered.
   This may seem like a no brainer, but a common misconception is that if one pays their insurance bill in a current month, then the car they’ve just purchased is covered. Although an insurance agency most likely won’t charge you twice in one month (for the old and new vehicle), they do need to know within a certain number of days of a new vehicle purchase, usually according to state laws.



7. The government sets insurance rates
   For the most part, the government has so say on insurance rates. State government does regulate the rates of insurance, but this is mostly to provide a cap, not to overcharge people. States can decide what they will and won’t let insurance providers do in terms of rates.



8. You don’t have to pay for an accident if a friend is driving your vehicle.
   No one is responsible for costs to your vehicle but YOU! Even if you are not in your vehicle while a friend is driving it, if an accident occurs, you are the only one liable for the car. Your insurance rates, claims records, etc. will be affected, not your friend.



9. Car color affects insurance rates.
   In fact, the color of your car is one of the only physical attributes of your car that does not affect your rates. Your vehicles make, year, body type, engine size, and model are the characteristics of your car that affects insurance rates.



10. When you have no-fault insurance, it means there is NO affect to your insurance policy.
    When you have no-fault insurance, this simply means that your insurance provider will cover you in an incident involving your vehicle no matter who is at fault. However, this does not mean that your rates and policy will not be affected should something occur that is not your fault.

If you live in North Carolina and find yourself with questions about auto insurance, contact the Paramount Insurance Agency today! We are an independent insurance agency that understands the needs of those in North Carolina and have enough experience to provide you with any information you may need on car insurance. For a free quote and more information, please visit our virtual insurance office at www.pianc.com and contact us today!