Sunday, August 19, 2007
Car Insurance Myths
There are many preconceptions that folks have about car insurance and as a result, they are prevented from making good financial decisions. Here are the five major myths that plague drivers.1. There’s no way around paying an expensive premium for a teen driver
While the statistics show that teenage drivers, especially 16-yr-olds, are at a dramatically increased risk of getting into an accident than other age groups, that doesn’t mean that your teen is doomed to have to deal with the claims service anytime soon. Automatically, you will have to pay a high premium to insure your teenage driver, but that premium can decrease if they keep their driving record clean, enroll in a driver’s ed course, and make good grades. Many insurance companies are willing to look at each individual teen and their risk factor, rather than lumping all teens together in one big group of high-risk customers. Know the discounts that you can benefit from if your teen takes certain steps to driving safely! Not only will you save a lot of money by securing these discounts, but it might just save your teen’s life. Another tip is that if you add your teen onto your own policy, rather than signing them up for a separate policy – the premium will be lower.
2. Changing car insurance companies is a big hassle
If you want to change your insurance policy, you might be intimidated by such a move and may not even follow through with it. But if for whatever reason you’re ready to go to a different insurance company – you got a new job and want to get more comprehensive coverage from elsewhere, you lost your job and need a more basic policy, or you ditched that classic car for a more conventional car and need distinctly different insurance. Whatever the case, there will likely be a time when you will reevaluate your insurance plan. And you should, because a switching insurance companies is not difficult!It takes little effort to cancel your policy. Think about it! Insurance companies purposely cancel customer’s policies whenever they fail to pay the premium. You’re not in a lifetime contract with your insurance company. However, be wary that if you do cancel your policy, other companies will be skeptical about taking you on as a customer. The way to avoid this is to just talk to your current insurance company and ask for them to request a cancellation. As long as you plan ahead, you can make it to where your new insurance company insures your vehicle about the time you get dropped from your old policy. All it takes is a little planning!
3. A high deductible is to be avoided
Some people are under the impression that a high deductible payment is a bad thing. After all, it means you’ll spend more money in the case of an accident, etc. However, a policy with a high deductible is likely a policy that offers low, monthly rates. Thus, in the long run – especially if you are a safe driver and don’t get into a wreck! – you will be paying less for your policy, rather than more. Always remember to consider every cost of your insurance before you deem it cheap or expensive.
4. It will be easy to repair your car or replace it if you weren’t at fault in an accident
Remember that the very minute you drive your car off the store’s lot, it’s begun to depreciate in value. The amount of money your insurance company said your car was worth when you signed up for your policy is not the amount it will be worth the next day, week, month, and year. So if you do get into an accident, even if it’s not your fault, you will have to keep in mind that you’re not going to get the original value of the car back. It’s important to be prepared for this.
5. You need every kind of coverage to feel good about your policy
A lot of people unfortunately get tricked into buying comprehensive car insurance that they just don’t need. While it’s tempting to insure your car for theft, vandalism, bad weather, and every kind of accident that can occur, it’s not necessary. If your car is old, used, and already been paid off, it may be more expensive to insure it so elaborately than to deal with the losses out of pocket when bad things do happen to it. So make sure you have a good idea of what your needs are before you compare different policies.
# posted by karthika @ 9:36 PM 
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