A common misconception among drivers of all ages is that they don’t need automobile insurance to drive legally in the U.S.
While it’s true that many states will let you drive without insurance, doing so can mean paying thousands of dollars out of pocket if you get into an accident and hit another car or driver.
Don’t get stuck with hefty bills; read on to learn about the 10 myths about automobile insurance—and why you should never drive without it.
1) I don’t need insurance if I’m a good driver
Many people believe that if they are good drivers, they don’t need to invest in automobile insurance.
However, this isn’t the case.
The truth is that rates can vary depending on the driver and what type of coverage they have.
A person who has an accident or gets a ticket may be considered high risk, and will likely end up paying more for their car insurance than someone who has been driving for years with no accidents or citations.
2) My rates won’t go up if I make a claim
This is not always the case, sometimes you can have your rates rise if you make a claim.
It’s important to know the difference between an endowment policy and affordable auto insurance.
An endowment policy will always raise your rates if you make a claim; however, when you have affordable auto insurance, it’s possible that your rates may not go up after filing a claim.
3) I only need the minimum amount of coverage
Insurance agencies can offer various types of car insurance, including an endowment policy.
An endowment policy is the most affordable type of car insurance and provides coverage against theft, fire, vandalism, and other related risks.
In addition to this, free car insurance quotes let you compare rates from different companies to get the best deal.
4) My car is too old to bother insuring
When you are shopping for automobile insurance, remember that it is not just the year of your car that matters.
There are other factors like how much the car is worth, how many miles it has been driven, and what type of driving record you have.
Insurance agencies will also look at your age and marital status when determining rates.
Endowment policies can be a good way to save on insurance rates as well.
5) I don’t need rental car coverage
Rental car coverage is one of the less expensive car insurance add-ons.
One of the main reasons people opt out of this option is because they believe they don’t need it.
Most people are surprised to learn that you can be held liable if you’re in an accident while driving a rental car without coverage.
The other common misconception about rental car coverage is that it’s optional and comes with a hefty price tag. That’s not true either.
6) I don’t need gap insurance
Gap insurance is not a mandatory requirement to buy car insurance in the United States.
Gap insurance and other coverage are usually bundled together when you purchase your car insurance policy, but if you have an endowment policy, then gap insurance may not be necessary for you.
For many people, the cost of gap coverage can be prohibitive and it often does not make financial sense to pay for it.
7) I don’t need to insure my teenager
You may think that you don’t need to worry about your teenager’s car because they are young and inexperienced drivers.
However, many insurance providers offer affordable auto insurance policies for new drivers that can protect them against the high risks of being a new driver.
Your teen should be looking at these options to make sure they have the best coverage for their needs.
8) My credit score doesn’t affect my rates
In most cases, your credit score will not affect the rate you pay for car insurance.
Many insurance companies don’t even use your credit score to determine rates.
There are a few exceptions to this rule which include the following:
(1) if you have a poor credit history and the insurer is using an endowment policy or
(2) if you live in a high-risk area and need a higher level of coverage.
There’s no such thing as affordable auto insurance: Some auto insurance companies offer competitively priced plans that are available through their website.
9) I don’t need to worry about fraud
Car insurance fraud is a very real problem. It’s estimated that 8% of all insurance claims are fraudulent.
If you drive an older car or one with fewer luxury features, you might be more at risk of being the victim of this type of fraud.
It’s important to understand the different types of automobile insurance so that you can protect yourself against scams.
10) I can’t afford to pay for insurance
One of the most common myths about car insurance is that you have to buy it.
However, if you’re a safe driver, then there are options for you.
For example, with some companies, you can get free car insurance quotes and in other cases, you might be able to get your rates reduced by getting an endowment policy.
There are also affordable auto insurance companies that offer competitive rates and reliable coverage so that people who don’t have the money can still afford to drive a vehicle.
If you are looking for an affordable auto insurance policy, just take the time to shop around.
Insurance agencies and car insurance companies offer a variety of different automobile insurance policies, so be sure to read the fine print and ask questions before you buy.
Remember, there are always 10 myths associated with automobile insurance.