Car Insurance Myths Continue to Thrive

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For many consumers, car insurance is considered only when buying a new car. Auto insurance is not an item that most people think about often, and due to this, a lot of insurance myths persist. If consumers had a better understanding of auto insurance, they could be better protected and save a lot of money, too.

Listed below are a few things that consumers frequently do not understand about auto coverage:

Myth: Cheaper vehicles cost more to insure than more expensive models.

Fact: The main factor isn't the price; it's this - what is the chance that a certain vehicle will cost the company money in the form of a payout? The cost of the vehicle is largely unrelated to the cost of covering it. The insurance premiums are based on several factors, including how much the vehicle will cost to repair and the chances of the car being stolen.

Myth: The color of an auto affects the price of the premium.

Fact: This myth has lingered for ages; the popular rumor is that red vehicles cost more to insure than other colors because the color is "dangerous." This is just a myth; the color of a car has no bearing on the amount of money you will pay to insure it.

Myth: You do not need any more coverage than state law requires.

Fact: The minimum amount of liability protection may not help you if you cause an accident with a luxury car or if you cause extensive injury to someone in a wreck. You should think about carrying more protection than the minimum required in most states in order to avoid a possible lawsuit.

Myth: Lower deductibles are better, so you do not need to "pay out" in event of an accident.

Fact: Auto coverage isn't designed to pay for every tiny expense; it's intended to pay for big costs that would create a financial burden. Don't pay extra in order to have a small deductible; it is not worth it. The majority of individuals rarely have accidents, so they do not often have to submit a claim. Most consumers are paying a lot of extra money in premiums for the benefit of having small deductibles. It makes much more sense to carry the biggest deductible you can afford, as you will save a great deal of money on your insurance premiums.

Myth: The government sets premiums, so there is no reason to shop around for the best price.

Fact: Individuals can save money by comparing companies for the lowest price, and smart shoppers will do just that. The Federal government has no say whatsoever in how pricing is established. State governments do have some say in how pricing works in a given state, but the prices may be just guidelines.

Staying in the know about car insurance can not only protect you, but it can also save you money. It can be well worth your time to know the difference between insurance myths and facts.

?Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing. Retro Marketing, established in 1978, is a firm devoted to informational Websites, including http://www.LemonLawHelp.net, a site devoted to automobile lemon laws, and http://www.Car-Insurance-Help.net, a site devoted to automobile insurance.