Top Five Auto Insurance Myths

insurance policy

Important facts you 'auto know' about car insurance


Myth 1:  Auto Insurance rates are lower for small cars because they're easy to repair and they can outmaneuver most accidents

Reality:  Believe it or not, smaller cars typically cost more to insure because they're driven by younger, faster and inexperienced drivers, as a general rule.  Because of this, they're involved in more accidents.  What's more, small cars tend to sustain more damage than larger vehicles during a collision.

But don't rush out and buy a supersized SUV just yet.  Large vehicles can cause significant damage to other cars in an accident which means you'll probably wind up paying more in liability premiums.  Your best bet is to stick with family-friendly cars like midsized sedans and minivans if you want to pay the lowest car insurance rates.

Myth 2:  You should find a great auto insurance company and stick with it for the long haul

Reality:  Actually, you could be losing quite a bit of money if you stay with the same car insurance company year after year.  Due to recent changes in the insurance industry, today's rates can vary widely from provider to provider.  It's good practice to check in with competitive carriers on a routine basis, to be sure you're getting the best price for the coverage you need.  And don't think that by switching providers, you'll risk losing added benefits your existing insurance company provides, such as responsive customer service or low complaint ratios.  There are a variety of great auto insurance companies on the market today competing for your business, with affordable rates and good customer satisfaction ratings.  Do your homework, compare carriers and rates and if it makes sense, make the switch.

Myth 3:  Sure, my credit score impacts a lot of things but it doesn't impact my auto insurance rates

Reality:  Sorry, but your credit score does indeed impact your auto insurance rates.  Even though this topic is widely debated, the general consensus is that people with poor credit tend to file more claims than people with good credit.  Right or wrong, if you're a driver on today's roadways and your credit is subpar, you're probably paying more for car insurance.

Myth 4:  I should choose the auto insurance company that offers the biggest discounts because their rates will be the lowest

Reality: If you think you'll pay the lowest premiums with the company offering the biggest discounts, think again.  Even though they offer the most significant savings, you might find they charge the highest rates.  It's important to do your homework by comparing carriers and policies, calculating total costs after all discounts have been considered, and looking beyond cost to customer service ratings.  When it comes to auto insurance, price isn't everything.  In the event of an accident, you want a company that's helpful and responsive if you have to file a claim.

Myth 5:  Even though I'm switching car insurance providers, I don't need to notify my existing carrier.  I'll just stop making payments to the old insurance company and start making payments to the new one

Reality:  You might not know it, but your old auto insurance company could flag your account as a cancellation.  Not only could a cancellation history damage your chances of getting coverage from another provider in the future, it could cause your premiums to increase. In addition to being a courteous gesture, it's best to send a written notification before you switch to avoid cancellation issues — one that clearly outlines the termination date.

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