Now that winter is approaching, and snow is just around the corner, safe driving cannot be talked about and understood enough. But in addition to safe driving is the importance of accurate insurance awareness. Knowing what to expect from your car insurance policy is crucial, which is why it is strongly suggested to review your benefits before the start of each winter season. More importantly than knowing your automotive insurance benefits, is understanding them so to not fall victim to the common insurance myths out there.
Continue reading to learn about the most common motor vehicle insurance myths, and the truths behind them.
Car Insurance Basics to Understand
Motor vehicle accidents are among the most common causes of death in this country. Practicing safe driving techniques is critical, but understanding your insurance policy can protect you and your family on the road as well. More than accidents, drivers fall victim to false insurance myths, rumor mills, and word-of-mouth.
Most Common and Untrue Car Insurance Myths:
☒ Credit Score Has Nothing to Do With Insurance Rates. Credit scores plays a major role in the amount of the total cost of your premium. That is because most car insurance companies use credit-based insurance scores to help determine risk. Not only does credit score influence insurance rates, it also can affect loan eligibility.
☒ Red Cars Cost More to Insure. The color of your car has nothing to do with the cost of your insurance premium. The primary factors that insurance carriers tend to base rates on include the make and model of the vehicle, the vehicle’s age, the vehicle’s body type, the vehicle’s engine size, the driver’s driving record, the driver’s credit history, and the driver’s age. So go ahead and get that candy apple red two door you’ve been eyeing; it will not affect your total insurance payment.
☒ New Cars Cost More to Insure. It is understandable that this myth has fooled consumers, since sometimes it is true; especially if your down payment is small. A new or expensive car may require more coverage, but the rates do not always increase simply because it is a new vehicle.
☒ Rates Automatically Increase After a Filed Claim. Again, this myth is understandably confusing. Although sometimes car insurance rates will increase after a claim, it is not always the case. The primary factors looked at include the severity of the accident, the driver’s claim history, and the total cost of the claim.
☒ Lapses in Coverage Do Not Affect Rates. Even if you are not driving, a lapse in insurance coverage will affect your car insurance rates when it comes time to start driving again. In fact, it can have a large financial impact on your total car insurance premium. So do not fall victim to this myth!
☒ You Can Keep a Totaled Car and Claim Insurance Too. Car insurance companies do not allow claimants to keep their totaled car if they also accept the insurance payout. They must choose one or the other. In some cases, claimants are not allowed to keep their car at all, even if they forgo a payout.
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