Car insurance misconceptions

The auto insurance industry can be a difficult world to navigate without doing some research beforehand. Drivers can easily become confused and upset when they realize their plans don't cover exactly what they originally thought. Be careful of falling victim to these common misconceptions:

No one steals old cars
While it's true that luxury cars may be a more attractive option for thieves, there are several reasons older vehicles are more likely to be stolen. For instance, old cars typically have weaker security systems, if any. There are also more old cars on the road compared to brand new vehicles, thus increasing these vehicles' chances of theft. Older car owners should file an insurance claim in the event of theft just as they would in any other case.

Insurance stays with the driver
If you are borrowing someone's car and get in a wreck, the car's insurance picks up the tab. Insurance always stays with the car and not the driver. That's why it's important to make sure you are always driving an insured car. Further, if a friend uses your car and gets into a traffic accident, then your insurance policy will pay the cost up to a certain limit, with additional expenses having to be paid out of pocket or through your friend's insurance.

All damage is covered
There are a number of different types of policies, each with very strict guidelines. Basic car insurance, or liability coverage, does not cover all expenses. In fact, liability only covers the expenses of others in case of an accident. Read the fine print to ensure your policy is large enough to cover a wide array of damages.

Switch insurers to cover up bad credit
If you have a poor credit history or less-than-stellar driving record, then there's no way to hide that information from insurers. All insurance companies have access to the same information. While you may be in pursuit of cheaper insurance, don't think providers won't do a background check first. The only solution would be to improve your credit or take a driving course to better your standing in the eyes of insurers.

Don't file small claims
Some drivers may be scared to file an insurance claim because they don't want their rates to increase. For small issues like dents, broken windows or minor accidents, don't expect your premiums to jump dramatically overnight. Insurance companies look at the big picture and examine your risk compared to your driving history. If you have several accidents in the past, then your insurance could become more expensive. However, even safe drivers have to file claims sometimes, so don't be fearful of the repercussions.

What's inside is covered
Expensive jewelry, electronics and other valuables that you keep in your car are not covered under a traditional insurance policy. These items are usually under the jurisdiction of property or even home insurance. You can, however, take out a separate policy for possessions you routinely leave inside your car. People who travel a lot for work will typically have such a policy.

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