In the United States, car insurance can be an exceedingly difficult topic to understand. Policies can vary widely, different companies can charge immensely different rates for the same basic liability and from state to state the laws themselves can change. What adds to this cocktail of confusion is the unfortunate fact that there are some myths that have become known as fact in this sector and it proves wise to examine some of the most common misconceptions to ascertain a more objective viewpoint.
One of the most widely accepted fallacies is that each individual ticket one receives will have the effect of drastically increasing the premiums that a driver is subject to pay. In reality, a large portion of tickets nationwide represent other infractions than moving violations or felony-related incidents. If a driver should receive a parking ticket or a citation for a faulty brake light, most likely his or her premiums will not increase. In fact, there are very few insurance companies which will raise payments from tickets of this nature.
Another false belief is that a driver’s insurance follows him or her directly regardless of what car they may be driving. On the contrary, insurance policies correlate to the vehicle and not the individual. This signifies that in essence, if a driver is involved in an accident while operating a friend or family member’s car, it is the owner of the car whose premiums will increase and not the driver. This can have potentially serious consequences should one not realize the responsibility they assume when driving a vehicle other than their own.
Another dubiously gray area is that of so-called “no fault” insurance coverage and what this title implies. Many drivers erroneously believe that such a policy means that neither party will be blamed in the unfortunate event of an accident. In fact, each insurance provider will pay the relevant claim for their policyholder. Simply put, fault will always be found upon investigating an accident, even if the initial causal circumstances are unclear. Therefore, whatever driver is found at fault can expect to pay an increased premium for their insurance in the future.
A final myth which may be the most financially dangerous one is the assumption that basic liability will prove adequate for a driver should he or she be involved in an accident. While each state has set minimums which drivers must pay to be covered, by no means does this equate to the appropriate amount of coverage if a major accident occurs. This basic plan will not include theft or collision and should the premiums paid be rock-bottom prices, the coverage itself may not be sufficient to completely protect a driver. This may incur substantial personal financial costs in the event of an accident. For this reason it is advisable for one to purchase a plan above basic liability to avoid such a scenario. Succinctly, all basic liability provides is the bare minimum of protection for a driver to legally be able to take to the road.
These represent some of the most common myths which have become prevalent when referring to car insurance policies. Smart drivers need to be aware of exactly what their premiums are paying for and exactly what the coverage provides. A little understanding can go a long way in saving vehicle owners exorbitant premiums and substantial out-of-pocket expenses.