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Myths and misconceptions about car insurance

In a perfect world, car insurance would be straightforward and everyone would understand exactly how it works. Unfortunately, that's not the way it is. Auto policies these days are lots of legal mumbo jumbo. Making matters worse is a flood of commercials flooding the airwaves with misinformation drowning out the facts and forcing drivers to figure out what is fact and what is fiction. Like saving $500 bucks a year or saving at least 15 % on a policy. How about helping hands and you are covered. sets the record straight: Here are 10 of the most common car insurance myths and misconceptions dispelled and debunked.

Myth No. 1
The color of my car affects my car insurance rates. Bright red cars, especially, are more expensive to insure.

Truth: The color of your car has no bearing on your rate. Red, yellow, purple, zebra-striped, it makes no difference.

Myth No. 2
"Full Coverage" includes rental and towing coverage.

Truth: Rental and towing coverage are individual riders that are generally added on separately and carry additional costs.

Myth No. 3
My driving history is the only factor that determines my car insurance rate.

Truth: There's a lot more to your rate than your record. Other factors include your age, type of car (typically, the better the crash-test score, the better your rate), the intended use of your car and theft rate in your area (urban areas or "port" cities usually have higher theft rates than do rural areas). Also, if you are a student, good grades can help reduce your premiums. Even your credit history can play a part in the overall evaluation.

Myth No. 4
Comprehensive insurance covers mechanical problems.

Truth: No. Comprehensive coverage pays for damage to your car that is not the result of a car accident. This includes such things as theft, vandalism, hail, fire and flood. But trouble with your transmission is on you.

Myth No. 5
If I stay ticket- and accident-free, my rate will go down.

Truth: Remaining ticket- and accident-free will help lower your rate over time, but other factors can keep that rate where it is or even make it go up. These include national and regional trends like the increasing costs to repair vehicles, rising hospital bills and more lawsuits.

Myth No. 6
Newer cars are always more expensive to insure.

Truth: Some newer cars are less expensive to insure than older ones are. It depends on the year, make and model. Check around.

Myth No. 7
Smaller, less expensive cars are cheaper to insure.

Truth: This depends on your coverage. For collision and comprehensive coverage, this is often not the case because smaller cars typically sustain more damage in an accident and have a higher rate of being "totaled" in a collision.

Myth No. 8
Buying insurance online saves me money.

Truth: Your insurance policy likely won't be important to you until you need to make a claim. Should you have a claim and find that you don't have the proper coverage, you may have to come up with the money out of your own pocket, and that could cost you far more than the savings you realized by purchasing a policy online. A good insurance agent can help you analyze your current policy and make recommendations so you have the best experience possible when you have to use your insurance. Additionally, many major brick-and-mortar insurers offer discounts that can be overlooked sometimes in an online purchase.

Myth No. 9
"No-fault insurance" refers to an accident that is not the policy-holder's fault.

Truth: "No-fault insurance" simply means that your own insurance company pays for your injury-related bills, regardless of who is at fault.

Myth No. 10
My car will be declared "a total loss" if it cannot be driven away after an accident.

Truth: Your insurance company will determine whether your car should be totaled. A total loss is declared when the repair costs exceed a certain threshold of the car's present value. That generally falls between 50 percent and 70 percent, depending on the insurance company.

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