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Seven Most Common Misconceptions about Auto Insurance

Like every good thing, there are many misconceptions related to auto insurance. People are surrounded by doubts for considering such insurance coverage but you don’t have to worry about anything because these are the seven most common misconceptions that you need to understand. These myths can turn into mistakes unless you learn to avoid them.

Myths and Misconceptions

    • Personal insurance can cover commercial use: Getting personal insurance coverage for a vehicle cannot compensate for the damages done by its commercial use. Unless you have bought a commercial insurance policy, your personal insurance coverage specifically excludes coverage when your vehicle is employed for commercial or business functions.
    • Full insurance coverage will cover any thefts in your vehicle: There is no such thing as full coverage where everything is covered. Your insurance policy is extremely specific about the boundaries and coverage afforded, there’s no contract which will conceal everything. So, if anything is stolen in your vehicle like your mobile, the insurance won’t cover it.
    • Insurance coverage cost doesn’t depend on anything: The cost of your insurance policy depends on a lot of things and it is foolish to believe otherwise. Number of factors like on your sex, age, zip code, coverage kind, car’s safety record, driving history, model, engine size etc. determines the insurance coverage cost.
    • Your credit history has nothing to do with your insurance rate: Some insurance firms take a drivers’ credit history into consideration while evaluating the insurance quote. Once your credit score is provided, you can get insurance with lower rate.

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  • You want the minimum insurance coverage: Each state has set the desired minimum level of money, for accident and property injury liability. These limits are also low. Emergency medical services can be very expensive. Low insurance coverage should be avoided. You may face financial trouble if you pay for medical bills and property injury because of being under-insured. Being under-insured might also make you vulnerable if other driver decides to sue you in an accident.
  • Insurance firms frame their costs and can charge any amount: Insurance firms cannot charge whatever they want they are needed to explain how the rates are calculated so that the rates can be filed for review for approval or rejection.
  • Your insurance covers any type of vehicle you drive: Each policy is completely different. Some firms solely transfer the minimum state liability necessities when others are a real broad coverage policy that transfers your specific liability limits. However, several insurance policies are restricted policies that solely cover the named vehicles, everything else is mechanically excluded and coverage isn’t afforded.
  • When your vehicle is taken, your insurance will pay off the loan: If you have got comprehensive insurance on your vehicle when it is taken or destroyed in an accident, the insurance can establish the true value of your pre-accident vehicle and pay you the particular money value. This estimation excludes interest rates, finance charges, licensing fees and taxes you have to pay throughout the time period of your loan.

It is vital to properly analyze and understand your contract and ask the necessary queries to address your issues with your insurance agent.

For more insurance tips visit: http://financeupdatestoday.com/.

About Stephanie

Stephanie Rosen is a financial market analyst and a blogger. She writes about stock market and investment opportunities around the world. You can find her latest ideas on here. Just signup our news letter today and receive regular updates of Stephanie.