It can be confusing to compare auto insurance companies, especially when you already have a false sense of what to expect. You might have some preconceived ideas about what car insurance is and how it works based on bits and pieces of information from friends, co-workers, relatives, television, etc. Let's explore five common myths about auto insurance to ease your mind.
Myth #1: Car insurance rates are determined the same way by every auto insurance company.
This idea leaves the impression that all auto insurance companies think and operate alike, which is certainly not true. Each insurance agency determines rates based on a number of risk factors that affect their company the most. The risk factors vary based on what types of drivers the company normally accommodates. Some car insurance companies cater to high-risk drivers, such as drivers with a poor driving record or a history of DUI. Others cater to middle-aged, married consumers or young drivers. As you can see, auto insurance companies determine rates differently based on their own criteria.
Myth #2: Car insurance rates are not affected by my credit score.
Unfortunately, auto insurance companies can and will perform a credit check to find out how you fare in the financial realm. With many insurers, a better credit score means lower rates. Your credit score may be checked when you purchase new insurance, transfer your policy to another agency, and when it's time to renew your policy.
Myth #3: If an accident occurs while someone else is driving my vehicle, their car insurance will automatically cover the accident.
No matter who's driving your car, your insurer will have to pay if the accident is deemed their fault or in some cases, "no fault." The driver's own insurance might, however, act as back-up coverage and cover any excess needs should they arise. Remember, it's your car and your responsibility no matter who's driving.
Myth #4: The type of car I own does not affect my car insurance.
It would be nice if you could own that beautiful sports car you've always dreamed of without it affecting your insurance rates, but this usually isn't the case. Many auto insurance companies do take into consideration what type of car you own, especially when insuring drivers under the age of 25. Sports cars usually render a much higher insurance rate because these cars tend to prompt "show-off" feats and/or speeding. So, buy your teenager a nice sedan for starters!
Myth #5: The government sets car insurance rates so there's no need to shop around.
This is false. The state government regulates auto insurance companies and their rates to ensure fairness for companies and consumers; however, the government does not set the rates. Your rates are determined by the insurer based on your credit score, age, where you live, the type of car you drive, marital status, and other factors.
As you can see, there's no reason to settle for one company's rates without comparing auto insurance companies. You can compare insurers easily using online resources to find out which companies offer the best coverage at a premium you can afford.
To learn more about subjects like auto insurance companies please visit the web site at: http://www.onlineautoinsurance.com/companies/
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About the Author
Chris Robertson is a published author of Majon International. All Rights Reserved. Copyright 2011 (Sat Oct 17 2009) Majon International. Majon International is one of the worlds MOST popular internet marketing and internet advertising companies on the web. Visit their main business resource internet marketing web site at: http://www.majon.com
