6 Insurance Myths That Could Cost You a Bundle
CLEVELAND, July 1 /PRNewswire/ -- According to Insurance.com's RateWatch for Car Insurance, average annual auto insurance rates increased in June 2009 to $1,884 after 4 months of steadily declining rates. The moderate increase is still good news for drivers who had been paying as much as $1,982 in October 2008. However, consumers hard hit by the economy should watch their renewal bills carefully.
"It's unlikely rates will change significantly in the second half of the year," said Sam Belden, Vice President at Insurance.com. "Before rates start to climb, consumers should invest 30 to 60 minutes comparing car insurance quotes. Switching can save thousands of dollars in the long run."
Before shopping for a new policy, Insurance.com offers tips about the most common car insurance myths:
"Full Coverage" means you are covered for everything
After you get a quote, ask about what's not covered. Are other drivers in your household covered? Will you have auto insurance coverage for your rental car when you travel or have a break-down? Can you add a car on the weekend and be covered? Better safe than sorry.
An accident is more "painful" than a DUI
Not so. While your rate might increase after an accident, a DUI almost always costs more. Your company may decide to cancel your policy, raise your rate or switch you to a company that specializes in "high risk" drivers. And, that leads to higher rates for 3 to 5 years.
Uninsured Motorist coverage is a waste because everyone has car insurance
15 to 25% of drivers go without insurance today, so Uninsured Motorist coverage is more important than ever. And, it costs very little to increase your limit.
If your policy cancels at 12:01 AM, you're insured all day
A policy has to end some time - and insurance policies always start and end at 12:01 AM in your time zone. One minute after midnight! So, if you receive a cancel notice, get a new car insurance policy before you head out for the night.
An accident that wasn't your fault can't impact your rate
Insurance companies check several consumer reports before finalizing your rate, and even a not-at-fault accident might make a difference. Plus, if you don't tell the truth, they don't have to insure you!
Insurance rates are fixed, so why shop?
There are hundreds of auto insurance companies ready to insure you, and each company has its own "rate formula", which is why auto insurance rates differ. Auto insurance discounts and other incentives vary.
The RateWatch report data is based on the lowest average car insurance rates quoted to consumers in each state. See the complete car insurance rate report.
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