When having a conversation with a friend or family member and it starts with, “My co-workers, sister’s aunt told me. . .” quickly close your ears and pay no attention to it. There are many misconceptions when it comes to auto insurance, and it is usually because one person, whoever it may be, said, “I think that. . .” someone else heard it and told someone else and they told someone else. It is a vicious cycle that can cause people serious problems. The following are some of the myths about auto insurance that everyone needs to know, so the next time you hear one of these crazy notions, you can be the one to set the record straight.
“My policy says I have no-fault insurance, which means I can never be responsible if I am in an accident even if it is my fault.”
This statement would be FALSE!
The truth about no-fault insurance is that if you are involved in an accident with another person, and who is at fault is not quite clear, your insurance company will pay for your immediate needs such as medical payments, car repair and a rental car. Once it is determined who is the responsible party for the accident, the insurance companies will work out who needs to pay whom. This, by no means, that even if you cause an accident you are not at fault.
“My friend’s sister’s cousin’s best friend told me that my insurance is going to go up if I buy a red car, because the police pull them over more.”
This statement would again be FALSE!
Your insurance rate is based, for the most part, on your driving record. The insurance company will adjust your rate up or down depending on average costs to repair or replace the specific vehicle you drive. It is more an issue of make and model than color. So in other words, you could potentially pay more for insurance on a cheap older compact car than someone else would on a brand new Mercedes. One needs to worry much more about their driving record than the color of car they drive, and definitely should not listen to anyone else when it comes to what color car to own.
“I let my best friend borrow my car and she hit a tree, I told her that she is responsible for the all the damage!”
Yet again, this statement is FALSE!
If they have your permission to drive your car, your insurance company will be responsible in the event they get in an accident. Insurance policies generally follow the car, not the driver, except in the case of financial responsibility bonds or SR-22’s. These insure the person to drive any vehicle that they are given permission to drive. However, if the damages or injuries caused in the accident exceed the limits of your insurance, the insurance company of the person you let borrow your car will more than likely be contacted about the balance. Either way, it is probably not a good idea to loan your car to people with questionable driving skills, or at least make them leave you a deposit for your deductible.
These are just a few of the common misnomers that people encounter when it comes to auto insurance. If you ever have questions on you policy, pick up the phone and call your insurance company, they are the authority and will have the right answer. So the next time someone wants to give you third or fourth hand advice, if it sounds too good to be true it probably is. In this day and age that people are just a phone call away at all times, it is safer to talk to your insurance company, and will probably save you a lot of headaches down the line.