Car Insurance: Misconceptions and Practical Tips for Affordability
Scenario: You have wrecked your car and remember you do not have collision coverage on your car insurance.
Reality: There is nothing worse than the feeling of knowing there is nothing you can do about it now and that you can’t afford to replace the car.
Solution: Avoid this predicament by taking time to read your car insurance policy carefully and asking questions to be certain of what is actually covered. Note: not all insurance policies are created equal.
Top Misconceptions about Car Insurance
Misconception: New cars are more expensive to insure than older models.
Truth: It depends on the make and year. Some older models are actually cheaper to insure.
Misconception: Driving history is the only factor that influences the cost of your policy.
Truth: There are a lot of factors that influence the price of you car insurance including age, theft rate in your area, what grades you make as a student driver, credit history and type of car.
Misconception: Car Insurance will cover my remaining car loan balance if I total my car.
Truth: Your insurance will pay the value of your car which may not be the remaining balance of your car loan.
Misconception: Full automobile Insurance coverage includes rental and towing coverage.
Truth: These items are covered for an additional charge.
How to Make Car Insurance More Affordable
1. Keep good credit. This will make your rate lower.
2. Make it a habit to be a safe driver.
3. Raise your deductible. This will save you 30 or 40 percent.
4. Buy minimum coverage. Each state has minimum liability factors. Check to see what your states minimums are for liability insurance.
5. Buy your homeowners and car insurance from the same company. Bundling the two will often lower your rate.