Auto insurance is a must for keeping your vehicle "street-legal" and also protecting yourself and other drivers on the road. Still, nobody who pays for auto insurance wants to pay more than they need to. That's why being aware of the truth behind some common car insurance fallacies can come in handy, potentially saving you money and keeping you in good standing with your insurer.
Myth 1: You Shouldn't Report Fender Benders
One of the most commonly perpetuated myths about auto insurance is that if you get into a small accident, it's best not to report it to your insurance company. In reality, even if there is no visible damage and you and the other driver involved agree not to report the accident, you could still find yourself in trouble. That's because the other driver could change his or her mind and decide to report the accident, thus leaving you to look like the "bad guy."
Myth 2: Insurance Companies Pay for Totaled Vehicles
It's true that if your vehicle is totaled, your insurance company will be on the hook for the majority of the expenses related to this. However, what many policy holders don't realize is that insurance companies generally only pay "fair market value" for a totaled car, which means that any expenses left over after computing fair market value is the responsibility of the car owner.
Myth 3: Car Color Can Impact Your Premium
Ever heard that red cars are more expensive to insure because they tend to get pulled over more by the police? This has no merit; the color of your car has absolutely no bearing on how much you pay for insurance. Instead, your premium is affected by other factors, such as:
- your credit score
- the safety rating of your car
- where you park the vehicle
- the age of the car
Myth 4: You Need a Police Report for All Accidents
Finally, if you get into an accident, your first inclination is probably to contact the police to obtain a report so you can have it for your insurance. However, a police report may not be required or even available to you in some situations. For example, if your accident took place on private property (such as in the parking lot of a grocery store), there may not be much police can do in terms of providing you with a report or determining who was at fault for the accident.