The Internet is a wonderful resource and platform for spreading misinformation at the same time. When it comes to auto insurance, for every great resource or article, there is also a website that posts incorrect and misleading information about insurance. This has led to the rise of many different car insurance myths that some people believe to be true.
In some instances, these myths actually hinder people from saving money on their car insurance. They use this incorrect information to make decisions that hurt their ability to get lower rates.
The Biggest Car Insurance Myths
People need to make sound financial decisions based on reliable information, but there are a few misleading car insurance myths out there and this misinformation needs to be corrected.Here are three of the biggest that get in the way of people saving money:
Myth 1: There’s no benefit in going to driving school
For some reason a lot of people think that there’s no benefit for them if they go to driving school. The truth is driving school is not only a vital part of learning how to become an effective and responsible driver, but it can also save you money on your car insurance. And, yes, your insurance company will ask you for your drivers certificate and look into it — so you can’t just say that you went to driving school when you actually did not.
Myth 2: Rates are the same with all insurance companies
This myth couldn’t be further from the truth, which is why it’s so important to get an insurance quote from multiple companies. You need to take the time to weigh your options, otherwise you could end up paying more than necessary for your car insurance. Also, make sure you understand the amount of coverage you’re receiving for each quote you receive. Remember, even if you get the same quote from two separate insurance companies, the coverages may be different. So make sure you get the most value for your money.
Myth 3: Minor tickets don’t have any impact on rates
Despite conventional wisdom, minor traffic tickets do have an impact on your insurance rates — especially if you get more than one. So think twice before you decide to speed, change lanes without signaling or overlook other traffic laws. If you do get a ticket, take care of it and then be extra careful not to get another one before the first ticket comes off your driving record. And avoid accumulating multiple tickets over time. This is because you could end up being labelled a high-risk driver. And that could lead to trouble finding a company that will insure you.
When it comes to auto insurance rates, you cant believe everything that you read, especially if its online. So be diligent when reading about ways to save money on insurance, and make sure you’re getting your information from a reputable source.
Most importantly, if you have any questions, don’t hesitate to call your insurance provider for clarification — otherwise, it could end up costing you a lot of money.
Photo Credit: H.L.I.T.
Perhaps some of the misinformation is due to insurers, or people associated with them, from different nationalities posting information on the web. For example, myths 1 & 3 are partly true in the UK.
Myth 1. There is something called pass plus for people who have just passed their test, which is a more in depth driving course. By giving new drivers a better education, it is supposed to entitle them to a discount from their insurer, but unfortunately, the statistics show that doing the course doesn’t actually make them any better drivers, so UK insurers have stopped offering discounts for this.
Myth 3. There are now so many speed cameras in the UK, that it’s getting rarer to find anyone without some penalty points on their licence, so some insurers are actually ignoring up to 2 minor speeding related offences when working out premiums. On the other hand, talking on your mobile phone, although it is a minor offence with the same penalties as speeding, can attract a huge 20% increase in premium. After all, you can creep over a speed limit without realising it, but you can;t “accidentally” use your mobile!
A myth I keep hearing is “drop collision and/or comprehensive coverage if your car is X years old.” I live in Massachusetts, where we have narrow roads, aggressive drivers, and bad weather. Since we also keep our cars till the wheels come off them (thanks, Len!), I like to keep my cars fully insured. True story: I was on my way to work one morning years ago, and planned to call my insurer that day to drop the collision coverage on my Dodge K-car, which at the time was 8 years old. Guess who got rear-ended on Rt. 128. Thankfully, I was OK and the car damage was minimal. But I really did not have the $450 it cost to fix the rear bumper (yes, this was many years ago.). If you have the discipline to put the money you save on collision/comprehensive coverage in a separate savings account and only pull it out for emergencies, then perhaps you can go without it. Most of us, myself included, do not.
Myth 1: Theres no benefit in going to driving school
Driving school is obviously true and good for the young. Many schools provide discounts if they pick students up at their school.
It’s also beneficial at any age especially for our seniors.
It not only helps in getting better insurance but driving better as well.
If you can improve your performance at work by going to school, why not improve your driving and insurance with driving school.
Myth 2: Rates are the same with all insurance companies
This is just a myth for obvious reasons. Every insurance company is different.
Myth 3: Minor tickets dont have any impact on rates
I just renewed my driver’s license. I ask the lady the same question and she said you better believe it. It does affect your insurance.
Absolutely right. Those incorrect information people get from the internet about car insurance may hinder and derailed their decision to make better judgement on insurance particularly for cars.
Going to driving school allows you to save money on insurance because it is one factor in determining the premium price.
Take into considerations that insurance companies have different offerings and coverage thus careful examination to these is critical in your decision making. Not all companies have the same price and coverage that’s a fact.
Lastly, don’t be a delinquent driver. Be a responsible driver.
I think it matters quite a bit the longevity of your relationship with your insurer. We have been with our insurer for about ten years. We have no claims, but my husband got two speeding tickets within six weeks. Our rates didn’t go up as we expected. Also it helps to find out from your agent what you can do to lower your rates. Some of the things they suggest will actually benefit you in other ways. If by attending a driving school you learn ways to avoid accidents, you’re better off in ways other than just a lower premium. Our teenage boys both had good grades and took driver’s ed, which of itself could have been much better than it was, but the insurance agency also offers an awareness course for teen drivers that provides a premium break on completion, but also, and mainly, gives kids a lot to think about before they get behind the wheel.