Misconceptions About Car Insurance

Auto Insurance

I have spent a long time in the insurance industry, where I realized that many myths are going around about car insurance. Here are some of the most popular ones. Remember to always double check with your insurer to ensure you know what to expect beforehand.

  • I received my first ticket for speeding; now my insurance premiums will inevitably increase. Generally, with your first speeding ticket, your premiums will remain unchanged. Most insurers will let this past if you haven’t received any fines in the last five years.
  • The debt I made will not have any effect on my car insurance rates.It may affect, especially if you missed some payments. Most car insurance providers will check your credit score to determine the rate you will have to pay. A person with poor credit can sometimes pay almost double on their vehicle insurance as their risk is much higher.
  • I crashed my friend’s car and told him not to worry as my insurance provider will cover it.Your insurance will only pay out if your friend’s insurance pays out first. This means that his limits must be exhausted first.
  • If someone breaks into your car and steal your belongings, your car insurance will pay for it. This is not true; you will only receive a payback if you file a claim with your home & contents insurance provider.
  • I am going to buy a white car as this will reduce my premiums. This is not true; the color does not have any effect on the premiums you pay. Therefore, buy a car in the color you like.
  • I didn’t own a car for the last couple of years, but this won’t affect my premiums. This will cause your premiums to increase, except if you have a good reason for not having a car with insurance during that time.
  • I can lie on my car insurance application to reduce my premiums. This is one of the worst things you can do. It may reduce your premiums, but as soon as you lodge a claim, your insurer will refer back to your application forms. When they start to ask questions you cannot answer, the normally decline the payment.
  • The insurance for a cheaper car will be less than that of an expensive one. Usually, this is the case, but sometimes it happens that the insurance company will ask a lower premium for the more expensive car. It all depends on how much the parts cost to replace.

There are many more myths like these, but these are the most common ones I have came across in my career.

Before choosing your next insurer, be sure to keep these things in mind. Look at the options different insurers have to offer, and always ensure you get what you pay for. With Hollard, you will always know what to expect, read more about their policies here.