Every state in the United States requires some minimum level of car insurance coverage for all drivers, so if you own a vehicle, paying a car insurance deductible is just part of the process. How much do you really know about auto insurance, though? There are a lot of untrue myths floating around out there, and if you let them guide your decisions, you may find yourself paying more than you need, or discovering that you don't really have the right coverage after all.
Here's a look at a few statements commonly made about car insurance. Some are myths, while others are actually true. Knowing the difference is key!
Buying insurance above the state-recommended minimum is a waste of money.
This statement is usually false. It's tempting to write off an insurance salesperson who tries to advise you to buy insurance above what your state requires, but in fact, he or she is likely making this recommendation with your best interests in mind. Arizona, for example, requires that all drivers carry enough insurance to pay $15,000 worth of bodily injury damage for each person injured in an accident. Medical bills often add up to much more than $15,000 in serious accidents, and the victim could sue you for the cost above the $15,000 that your insurance covers. Paying a few more dollars per month for $50,000 or $100,000 worth of personal injury coverage is much less painful than being sued for this amount.
If you let someone else drive your car and they get into an accident, your car insurance will cover it.
This is actually true. Car insurance policies follow the car, not the driver. If a friend or family member gets into an accident while driving your car, your policy will come into effect. Thus, someone else having an accident in your car could lead to raised insurance rates for you. Keep this in mind when deciding whether or not to lend someone your car. You might want to consider putting friends who drive your car frequently on your policy.
You can exclude certain drivers on your insurance policy.
In most states, this is true. By excluding a driver from your policy, you are specifying that your insurance company will not cover any damages that occur when that person is behind the wheel. Excluding a family member who lives with you from the insurance policy on your vehicle may help lower your insurance rates if that person has been convicted of a DUI or has had a lot of accidents. For example, if you have two cars, excluding this driver from the policy on one vehicle and letting him or her only drive the other vehicle may lower your rates. Keep in mind that if that person does drive the car with a policy from which he or she is excluded, you'll have to pay for damages out of pocket.
If you choose not to buy auto insurance, the worst that will happen is you'll be responsible for costs related to an accident.
Unfortunately, this myth is false. All states require minimum car insurance, and if you're caught driving without it, you'll be hit with some pretty harsh fines and perhaps even jail time. If you get into an accident without insurance, the other driver may have uninsured driver insurance to cover some of the damages, but he or she can sue you for all other costs. By the time you take into account lawyer fees, fines, and the accident-related costs, you'll be out thousands, or perhaps even hundreds of thousands of dollars. Just buy insurance. It's a much safer bet.
Car insurance laws vary by state, but in every state, it's a good idea to purchase enough coverage to protect your assets should you cause an accident that leads to personal injury or property damage. If you're not sure what coverage you need, talk to your insurance representative. They have the unfortunate reputation of being out to get your money, but in reality, they're an under-utilized resource and can guide you in the right direction when it comes to choosing a policy that's right for you.Share