For a large number of consumers, car insurance is considered only when buying a new vehicle. If consumers had a better understanding of car insurance, they could have better coverage and save a lot of money, too. Car insurance is not an item that many people think about regularly, and because of this, many myths abound.

Here are a number of items that consumers commonly misunderstand about car insurance:

Myth: The color of a car can affect the price of the premium.

Fact: This is just a myth; the color of a car has no bearing on the amount of money you must pay to protect it. This misconception has been around for years; the popular misconception is that red vehicles are more expensive to cover because the color is “dangerous.”

Myth: Low-cost vehicles cost more to insure than more expensive models.

Fact: The cost of the car has little to do with the cost of insuring it. The main element is not the cost of the vehicle; it’s this - how likely is it that a certain car will cost the insurance company money in the form of a payout? The costs of insurance are determined by a number of factors, including how much the car will cost to repair and the odds of the car being stolen.

Myth: Lower deductibles are better, so you won’t need to “pay out” should you be involved in an accident.

Fact: The majority of people rarely have wrecks, so they seldom have reason to file a claim. Auto insurance is not designed to pay for every small expense; it is designed to pay for big expenses that would place a strain on your finances. Don’t pay extra in order to have a smaller deductible; it is not worth it. It makes much more sense to go with the biggest deductible you can afford, as you will save a lot of money on your premiums. Many, if not most people are paying a lot of extra money in insurance premiums for the benefit of having low deductibles.

Myth: You don’t need any more coverage than state law mandates.

Fact: You ought to consider carrying more coverage than the minimum required in most states in order to avoid a potential lawsuit. The smallest amount of liability insurance may not help you if you cause an accident with an expensive vehicle or if you cause extensive bodily harm to another party in an accident.

Myth: The government sets rates, so you don’t need to shop around for the lowest price.

Fact: The states do determine how insurance pricing works in a particular state, but the figures may be just recommendations. Consumers can save money by comparing companies for the lowest price, and wise shoppers will do so. The Federal government has no say whatsoever in how pricing is established.

Keeping in the know about auto insurance can not only protect you, but it can also save you money. It’s well worth your time to know the difference between car insurance rumors and facts.

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