Every driver has to deal with the dilemma of paying for car insurance, and yet it’s also an area which a lot of people don’t understand in very much detail.
The reason that this is a problem is because even small misconceptions could cost you big when choosing cover.
Dispelling common myths can save you from the spiraling expenses of car ownership, so read on for an investigation of the most widespread misunderstandings.
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Inexpensive cars are cheaper to insure
If you drive an affordable car, the insurance costs will be low as well. It seems obvious, right? Well in reality, this isn’t always the case, and insurers are more interested in the type of car rather than its current market value.
You might think you’re saving a bundle by driving an older vehicle, for example. But if it is a sporty model with a big engine under the hood, then it will be deemed as more of a risk than a newer, more expensive and overall safer family-oriented equivalent.
In short, insurers have endless data on driver demographics, and it’s easy to get caught off guard if you’re only focusing on the car’s price. Even if you need cheap SR22 insurance near you after a conviction, changing vehicles can secure insurance savings.
Car insurance will cover you if your vehicle was purchased on finance
It’s a common scenario; you snap up a brand new vehicle as part of a finance deal that lets you repay it monthly, rather than stumping up the full sticker price upfront. Then you get in an accident, your car is totaled, and you go to make a claim to cover what you owe to your lender.
The problem here is that insurers will never pay out the remainder of your auto loan. Instead, they will cover you for the current value of the car in question, which will have gone down the moment you drove away from the showroom due to the way that depreciation impacts this type of asset.
This is where gap insurance comes into play, allowing you to also be protected in the specific scenario where you owe much more on a finance deal than your car is now worth, and you need to make a claim.
You can drive any vehicle under your existing policy
It’s unwise to assume that if you’ve insured your personal vehicle, this cover will also apply if you decide to jump behind the wheel of any other car, such as a rental.
This is rarely the case, because insurance is associated with the car and not with the driver. So if you do rent or borrow a car, be sure to check whether your policy will carry over with you, because in most cases it will not.
Your possessions stored in your car are protected by your insurance
Another common mistake that car owners make is to believe that anything they leave in their car while it is unattended can be claimed against if the vehicle is stolen or broken into and the belongings are snatched as a result.
While certain insurers do cover personal items, others do not, so you need to read the small print and preferably avoid storing anything valuable in your car when you are elsewhere.
You don’t need to get additional insurance for business use of your vehicle
Lastly, you have to tell your insurer how you intend to use your car when you purchase a policy. If you are going to be driving both for personal reasons as well as for business purposes, then you have to be clear about this.
If not, you might find that you aren’t covered if you get in an accident when using the vehicle in a professional capacity.
