Buying car insurance for the first time can be a daunting experience. With so many terms and conditions and a lot of legal jargon, it can feel like making the right decision is impossible for anyone but a qualified lawyer.
One thing that can make the process a lot easier however, is knowing fact from fiction. Let's have a look at some common car insurance myths and why they are not true.
1. A car's colour affects the insurance
Whatever you have heard, be it red cars or white vans resulting in premium quotes for insurance, it is pure nonsense. Insurance companies will be solely concerned with the actual mechanical features of your car that will affect its driving performance. For example the make, model year of production and engine size.
However, remember that other recorded behaviour, notably any previous driving violations may have an effect on the insurance quote that you are offered.
2. Your credit does not affect your insurance rate
Your credit score is widely seen amongst all types of insurers and financial institutions as an indicator of how well you can manage your money. Insurance companies, like any other form of businesses, want to know that you will be able to pay them on time, particularly if you have a monthly agreement.
Therefore having a lower credit score can often result in a higher cost as a way to mitigate this risk for the company.
3. An old car won't be targeted by thieves
It may feel to you as though your old beaten up model looks like its not worth stealing, but many thieves actually target older cars. This is because they tend to have less modern security features, such as sophisticated locks and car alarms. Therefore it is important to invest in good car insurance regardless of the age or expense of your vehicle.
4. Insurance covers me for everything
This is sadly a common misconception and one that can lead to future heartbreak. The only type of insurance that covers you for all incidents, for example weather damage, traffic collisions or vandalism, is comprehensive cover. This type of coverage is usually optional and will need to be specifically requested. It is also usually more expensive.
Make sure to thoroughly check what incidents your insurance covers and think about whether comprehensive cover would be more suitable for you and your vehicle.
5. Expensive objects within the car are insured
If your personal property stored within your car is damaged as the result of a collision, or stolen during a break in, then it is unlikely that it is covered by your car insurance. If you want to protect these items the you should look to add them into your home insurance policy.
6. Insurance covers the driver not the car
The majority, if not all, car insurance options cover the vehicle – not you, the driver. This means that you will need alternative insurance if you want to drive a rental vehicle, a second car or a friend or partners car. It is possible to find insurance options that allow you to drive more than one car, however they will be more expensive.
This fact is also relevant if your car is involved in an accident when you were not the driver. Because the insurance follows the car, it is still you who is responsible even if it was your friend who crashed the car.
7. Personal insurance will cover business uses of your vehicle.
Very often your insurance stipulates that the vehicle is not being used for commercial or business purposes. Therefore if you are self employed and use a van to carry your equipment or sometimes even if you use your personal vehicle to attend business events, your insurance may not cover you.
If this is a situation that you could find yourself in, make sure to check your insurance parameters.
8. You don't need insurance if you don't drive your car
If you don't drive your car you are less likely to be involved in a collision, but a parked car may still be stolen, broken into or damaged by another vehicle. Insurance covers the costs of repairing damage to your vehicle after a crash or a break in. Both of these events are still possible even if you do not take it out on the roads.
9. Insurance companies can cancel your insurance at any time
Insurance companies need to have a valid reason to cancel your policy, they cannot do so suddenly in the middle of a term. Know your rights and challenge suggestions that this is the case.
However, remember that actions such as not paying your premiums or committing fraud are considered adequate grounds for an insurer to cancel your policy.
At Trans Pacific Assurance Limited (TPAL) we understand that motor vehicle insurance can seem complicated. We aim to find you the right cover that matches your requirement. Get in touch with our team today for more information.