Get Smart - Ditch The Urban Legends!

By Author: Marcus Stalder
Total Articles: 491
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When you're thinking about car insurance, and rates especially, there are almost too many things to keep in mind. And with that in mind, let's clear some of those things up! Don't be misled by these myths. You'll want to know the difference between fact and fiction to avoid any confusion when choosing your coverage.

Sure you can show off to your friends, but these are also very important to appropriately shopping for and evaluating your insurance so that you will be ready when you have to file a claim. Make sure you're prepared!

Urban Legend 1: Having a red car will raise your insurance rates

The truth is that car insurance companies do not inspect (or care about) the color of your vehicle. There is, however, a relationship between rates and color: drivers who own red cars tend to, on average, pay more in car insurance. The reason for this apparent contradiction is that red is a popular color for sporty, high-performance cars. Those vehicles are more expensive to insure, but that is by virtue of their engine power, theft rate, and other factors, not their color.

Urban Legend 2: Thieves tend to target ...
... new vehicles over used vehicles

The most common vehicles stolen actually tend to be used. According to the National Insurance Crime Bureau, eight of the ten most common vehicles to be stolen in 2007 were made in or before 1997. There are a few reasons for this.

The first is that used cars are just easier to steal. As locking and alarm systems are refined, thieves are less familiar and probably less equipped to deal with them. Additionally, a slowing economy means people are holding onto their cars for longer periods, which raises the demand for used car parts.

That doesn't mean you should leave your 2012 Porsche 911 unlocked, of course. (You should probably at least guard it with your unicorn.)

Urban Legend 3: A single speeding ticket can increase your rates

More often, it will take more than a single speeding ticket to affect your rates. Since speeding tickets are quite minor infractions, a single ticket (all other things being equal) is probably nothing to sweat about.

That being said, there are a number of factors about each particular speeding ticket that can make a difference. Your average speeding ticket might not be much, but if you're caught doing 130mph in your fictitious, unicorn-guarded Porsche 911, expect a rate hike, if not more serious legal problems.

Urban Legend 4: Comprehensive coverage will pay for a rental car

This actually varies significantly from auto insurance policy to auto insurance policy. Not only will some comprehensive policies not reimburse you at all, but even if they do, they may have a low cap on how much they will pay to reimburse you for a rental car, both daily and in total.

Because of this, you'll want to know exactly what the terms are on your policy so that you can effectively plan ahead in the event of losing your vehicle. Or, if you're unhappy with it, change your auto insurance policy.