Common Car Insurance Misconceptions You Need To Know About
There are many misconceptions that drivers have in regards to car insurance coverage. Hearsay is something that many drivers take seriously when sometimes they are being told fictitious statements.
The first misconception is that drivers might not need to buy car rental insurance coverage. If you have comprehensive coverage or collision then the policy typically also applies to a rental vehicle. If you have liability coverage only then the coverage might be helpful if the car gets totaled or seriously damaged.
The second misconception is that if you have the minimum state requirements for car insurance coverage then you will never face a lawsuit after a car accident has occurred. The truth is that you will be meeting the legal requirements for coverage from the state but you can still be sued if you are the at fault driver and the damages exceed your coverage limits. It is a good idea to have at least $300,000 in coverage for an accident.
The third misconception is that your credit score cannot be used against you when you apply for car insurance coverage. Your car insurance company will ask you for your Social Security number because they want to see a copy of your credit report.
Financial responsibility is important to car insurance companies so they want to see how responsible policy holders are. If you have a poor credit score then your insurance premium rates will probably be higher. Consider paying down your debt to increase the score to try to prevent an increase in your premiums.
The fourth misconception is that if you are not the driver of your car during an accident that you will not be held liable for any of the damages that were incurred. This is because unless a car is reported stolen or the person is a covered member of the household then the damages may not be covered. Many people allow others to borrow their vehicles. This can be a very dangerous thing to do because you could end up paying the price in the end.
The fifth and final misconception is that if you are hit by an uninsured driver that your insurance company will protect you and will pay for your insurance claim. If you do not have uninsured motorist coverage on your vehicle then your insurance company does not have to pay out any money to you to cover your damages.
It is important to have this kind of insurance coverage in place because it protects against a real issue. Millions of people are uninsured so being left without a safety net while uninsured is a bad idea. Approximately one in six drivers is uninsured at any time so it pays to buy the coverage.