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Common Car Insurance Myths Exposed

Certain car insurance myths are a part of our popular culture in spite of the industry's best efforts to educate the buying public about the real facts. Some auto owners steer clear of red for fear they'll never be able to afford their insurance premium. Others think their employer's insurance will automatically cover them if they get into a car accident while using their personal vehicle for work purposes. There are many persistent myths that have become so ingrained into our collective conscious that they are sometimes hard to separate from the truth. In this article we spend a little time examining a few of the more prominent myths and compare them to what's actually true in each case.

Red Cars Don't Cost More

One of the more stylish myths that have been in existence for many years is the one that says red cars cost more to insure. There is a certain logical basis for the misconception, but a brief explanation (that might seem like splitting hairs) can easily set the record straight on this one. There is quite simply no protocol within the auto insurance industry for assigning a premium based on the color of a vehicle. It simply does not exist. Insurance rates are based exclusively on risk in all of its different forms. The risk the driver presents to the company is strongly factored in. And yes, the vehicle itself is also looked upon as a source of risk.

The loss history of any particular make and model automobile is a huge component of any auto insurance premium. So in this way, the color of a car may indirectly influence premiums. Here's how: perhaps the red variety of a certain model sports car is more desirable to thieves than any other. For this reason, for the higher rate of theft, that car will become more expensive to insure. But that price difference will be spread out across all colors of that sports car, not just red ones.

Drivers who gravitate towards red cars might be more prone to risky driving behaviors. The flashy driving style of the driver, then, and not the car, might lead to higher rates for that particular driver, if he proves unable to handle the vehicle and has a history of accidents or major moving violations. So the color of the vehicle itself is not directly taken into account in calculating premiums. But in certain indirect ways, it could make a difference, although a single driver will not pay more for a red coupe than she would for a yellow one of the same make and model with all the same features.

Work Won't Cover Your Accident

Another common myth among auto owners is the one that says if they use a personal vehicle for work purposes, their employer's auto insurance will cover all damages if they get into an accident. This is not automatically true. In fact, there are many cases where your work's insurance will have nothing to do with the case, and your personal auto insurance provider will not only deny your claim, but actually cancel you in a lot of cases for inappropriate insurance given the use of the vehicle.

There is a way you can be covered as an employee using your personal vehicle for work purposes. If your employer carries a certain variety of non owned vehicle insurance as part of their policy with provisions for these types of circumstances, you might be covered. But this is a murky area at best and it is wise to see the details of your employer's policy before you agree to use your car or truck for work purposes. Otherwise, you are setting yourself up to possibly see a denial of your claim even if you have been a long time customer of an insurer and have always kept up with your premiums. And getting canceled is a whole different nightmare, leading to a mark on your credit and higher rates going forward with a new carrier.

Parking Tickets Don't Raise Premiums

Parking tickets themselves do not have any bearing on your auto insurance premiums. There is a way that they can end up leading to a rate increase, however. If your license gets suspended as a result of unpaid parking tickets, your driving record will be compromised, and you will certainly have a much more difficult time getting into an affordable policy. You might even be pushed into a high risk plan.

There are many other common car insurance myths as well. From assumptions about the reasons for high rates to misunderstandings regarding coverage limits and exclusions, a lack of understanding can be dangerous for anyone. As a savvy consumer, you should always get the facts before making choices based on an assumption of truth.

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