Busting common car insurance misconceptions

Think you know everything about car insurance? Like other forms of insurance, automotive coverage is shrouded with myths and misconceptions that stem from a lack of knowledge. From believing that red cars cost more to insure to associating age with premiums, there are many misconceptions held as true that could affect your next car insurance coverage choice. This article looks to break down a number of misconceptions to help you sharpen your knowledge about car insurance.

Your premiums will automatically lower at 25

Will your premiums lower when you turn 25? Younger drivers attract higher car insurance coverage due to the relative lack of experience. As you get older, there is a high chance that your premiums will continue to drop. However, only people with stellar driving records will attract a reduction in premiums. People who have experienced an accident or who may have racked up tickets and fines will be perceived as being riskier drivers, which will do little for their premiums even as they approach 25.

More expensive coverage is better

Many people will perceive insurance as having a direct correlation with pricing, whereby more expensive policies are perceived as being better. Different agencies will offer their own insurance products with individual pricing. The price will not represent value to you and may not be directly related to the level of coverage. Some plans will only be more expensive because you represent a higher risk.  It is important to read through and understand the details for every policy to know what level of coverage is provided. You should also research different products to find the most sufficient option within your budget.

More coverage is ideal

When setting up an insurance policy, agencies will cover different risks that you may be likely to face. The terms will detail out the level of coverage offered. Many people believe that more coverage is ideal, since it reduces the risk of loss due to external factors. But more coverage does not always offer value. Some people will just not face certain risks under their plan, which makes paying more for coverage a poor decision. You should always assess your risk to determine what you need to be covered for. Analyzing your risk doesn’t mean going for lower coverage. The minimum state requirements for coverage, for instance, might be an affordable car insurance option but you could be exposed to higher risk of loss or damage. By knowing what risks you may face, you will be able to find the right policy.

My kids are covered

Many people will let their spouses and children use their vehicles because they believe that they are also covered under their plan. While some insurance options offer coverage for spouses, there are many plans that will specifically exclude other drivers. You should look into the detail of your specific plan to understand whether your children are covered before letting them behind the wheel. This will enable you to know the risks involved and the potential cost to you.