What you think you know can cost you a lot of money when it comes to car insurance. Unfortunately, most of us believe a lot of car insurance myths, some of which can lead to behaviors that cost a lot of money.
Some of the car insurance myths that can cost you a lot of money by raising your premium through the roof include:
“Shopping for insurance online will not save me any money.” Not true; the new website Goji.com has discovered that all insurers have preferred driver profiles, but they refuse to tell clients about them. Services like Goji can now get you an insurance quote in less than five minutes.
“My insurance agent has my best interest at heart.” This is often not true. A recent expose from insure.com showed that agents are hiding a wide variety of information from their customers, including methods of lowering premiums and knowledge about driving records. The main reason for this is how insurance agents make their money by selling insurance. To make matters worse, some insurance steal from their clients and lie to them. Authorities in El Cajon, California, charged an agent named Dawna Louise Ernster with 14 counts of felony grand theft and 14 counts of failure to disclose events affecting insurance coverage. That’s right; lies to clients by insurance agents are so common it is a crime. Be very careful when an insurance agent tells you anything; some of them are not trustworthy.
“My insurance costs are based on my driving record.” This one is definitely not true; insurers use a wide variety of criteria that have absolutely nothing to do with your driving record. These include your marital status, your income level, your job, your level of education, your credit report, your sex, your geographic location, and even the month you buy insurance in. The reason for this is that insurers have little or no way of telling what your actual driving habits are unless you attach a telemetric device to your car.
“All car insurance is the same, so I don’t have to shop around for it.” Not true; a study found that that the cost of a similar auto insurance policy for an adult in Spartanburg, South Carolina, varied by $783 a year. What’s worse is that insurance companies now use special software that identifies those customers that don’t shop around and then charge them more for it. So shopping for auto insurance definitely pays.
“Bundling is the best way to save money on car insurance.” Definitely not true; the best way to save money on insurance is to get your policies from different companies. Those that are willing to buy insurance from different companies can save money and are less likely to get locked into higher prices.
“Changing insurance companies will cost me money.” Also not true; insurance is a highly competitive business, and insurers want your money. They are willing to offer steep discounts to get you to switch. Willingness to switch will save you money.
As you can see, a lot of the things you probably believe about insurance are not true. The more you learn about auto insurance, the more you will save.