5 car insurance myths you need to know

There is a lot of misconception and myth surrounding buying car insurance. The more educated you are, the better choices you can make when shopping for auto insurance. Here are five common car insurance myths.

• Myth #1: You can always save more by insuring your home and auto with the same company
  This is not always the case. Some companies prefer to write homeowners insurance more than auto insurance or vice versa, so the discount you receive for packaging your policies with the same company may not offset the higher rates you’re paying for the coverage they don’t prefer to write.

• Myth #2: Buying car insurance online always costs less
  Some consumers think that by buying auto insurance online or through a direct writer they will be able to save money by cutting out the middleman (i.e. the insurance agent). In some cases it may be true, but your local independent insurance agent may actually be able to get you a better rate with a smaller company that you can get through a major online company. These smaller companies don’t have the expenses of the larger companies and can often pass this savings on to the consumer.

• Myth #3: Car insurance companies always raise rates after you have an accident or speeding ticket
  Again, not true. Each company has a different tolerance for loss, and some may actually allow you a minor traffic violation or accident before they surcharge your auto insurance rates. Some companies such as Nationwide and Allstate actually have special policies that give you “accident forgiveness” in case of a minor fender bender. By paying a slightly higher premium, you can ensure that your rates won’t rise due to your accident.

• Myth #4: The color of my car impacts how much I pay for car insurance
  You’ve probably heard that red cars cost more to insure due to the likelihood that the owner will drive faster. There is no correlation between the color of car you drive and the cost to insure it.

• Myth #5: When I buy a new car, it is covered as soon as I drive off the lot since I have a car insurance policy
  Your new car is covered, but in most states it’s only insured at the best highest you carry on your current policy. So if you only carry liability coverage on your existing vehicles, then your new car has no comprehensive or collision coverage. And you are also required to notify your company within a specific time period of your new purchase, so check with your current company to see how many days you have before requiring notification.