ConsumerMan: five car insurance myths – Business – Consumer news – ConsumerMan, NBC News
Five thickest myths about auto insurance 
Below:
Hop to data See the latest rates around the country
No one likes to buy auto insurance. It’s complicated. It’s expensive. And who understands how the premiums are determined? Maybe that’s why there is so much misinformation about insurance coverage and pricing.
The non-profit Insurance Information Institute helped me tackle five common auto insurance myths:
Myth 1: Crimson cars cost more to insure
Auto insurance companies usually suggest a range of discounts. Here are some of the most popular ones to ask about:
* Driver education courses
* Low mileage driver
“Frankly, it doesn’t matter whether the car is crimson or green or purple,” said Loretta Worters, vice president of the Insurance Information Institute.
Insurers are not worried about color and neither is law enforcement.
“We look at behavior, not appearance,” said Bob Calkins, a spokesman for the Washington State Patrol. “We don’t profile people, and we don’t profile cars.”
Insurance companies do care about the type of vehicle you drive, including the make, model, sticker price, engine size and year. Is it popular with thieves? Is it more costly to repair? Does it have a good safety record?
There does emerge to be correlation inbetween vehicle model and the likelihood of a traffic ticket. A latest investigate by Quality Planning (a San Francisco-based analytics company that works with auto insurers) found that drivers of flashy cars are often more aggressive and therefore a greater risk.
Based on this examine, drivers of the Mercedes-Benz SL-Class convertible are four times more likely to be cited for a moving disturbance than the average driver. Quality Planning’s list of Top Ten “Spirited Vehicles” includes Toyota’s Camry Solara Coupe, Scion’s TC Coupe and the Hummer H2/H3 SUV.
Other factors that go into determining your premium: how many miles you drive each year, when you drive, where you drive and if you’ve had any previous accidents. These days your credit history is also considered. Insurance companies say their data display people with a good credit history are less likely to file a claim.
Myth Two: Older drivers pay more for car insurance
Many drivers who are fifty five or older can get their rates diminished — by up to ten percent for three years — if they successfully finish an accident prevention course.
“Insurance companies look at these mature driving courses and find them to be a good thing,” Loretta Worters told me. “It helps refresh an older driver and keeps them acute and keeps them safer on the road.”
Check with your insurance agent to find defensive driving courses that are approved by your insurer. If you are retired or no longer working utter time, see if you qualify for a discount based on driving less.
Myth Trio: Your insurance policy covers any harm to your car
It doesn’t work that way. Liability insurance (required in some state) covers you if you hurt someone or harm their property. Comprehensive and collision coverage protect your vehicle. That is why this is always optional coverage. Note: It may be required by the lender if you have a lease or car loan.
Comprehensive pays for harm to your vehicle (including cracked glass) caused by something other than a collision with another vehicle or object. This would include losses caused by fire, theft, vandalism, severe weather, flooding and falling objects (such as a tree limb) or hitting an animal.
Collision coverage pays for harm to your vehicle caused from a collision with another vehicle or object. It also covers harm caused by potholes or if your vehicle rolls over. Your insurance company will reimburse you for the cost of repairs (minus the deductible) even if you are at fault for the accident. The National Association of Insurance Commissioners points out that this is relatively expensive coverage, more costly than comprehensive.
If you want to fully protect your vehicle for all types of harm, you need to purchase both collision and comprehensive coverage. But many people with older cars sometimes drop these coverages in order to save money.
“If the vehicle is worth less than a thousand dollars or less than ten times the insurance premium, purchasing this optional coverage may not be cost effective,” Worters said.
Myth Four: Soldiers pay more for insurance
“Many insurers also provide discounts for former members of the military and their families,” Worters said. “So it’s a good thing for military families to look into.”
