10 Common Auto Insurance Myths Shattered

Myth 1: Third party coverage is always cheaper than comprehensive insurance

The truth: While it may seem logical that a lower level of coverage costs less, it often isn’t. Drivers who opt for a lower level of coverage tend to make more claims, which has driven up the cost of these policies.

For many drivers, comprehensive coverage can cost the same or even less than third party or third party, fire and theft coverage – with the added benefit that your own vehicle will be covered for damage. You can read more about this in our guide.

Myth 2: My auto insurance premium won’t increase if I don’t claim

The truth: In an ideal world, that would be the case – after all, you accumulate a no-claim bonus every year that you don’t claim. However, there are many external factors at play that affect the cost of insurance, including:

  • most insurers have a maximum lossless bonus, so you will stop creating a discount after a certain number of years

  • insurers will take your age into account, so once you reach a certain age you will be considered a higher risk and may see your premiums increase

  • your premium will change if you make certain adjustments to your policy, such as a change of job or address

Myth 3: No loss premium protection will prevent my premium from increasing

The Truth: Many people think they are paying extra to protect their no claim premium will prevent their premium from increasing if they make a claim. But like many things related to insurance, it’s not that simple.

While you won’t lose your health insurance premium if you make a claim and have paid to protect it, your premium may still increase because your insurer may consider you a higher risk. Since your no-claim bonus is a discount applied to the bonus, what you pay on renewal may increase further.

Plus, there’s a limit to the protection offered – if you make more than one claim per year, you might find your insurer waives the premium for a year or two (but you’ll likely be even better off than if you had no protection and you lose your entire rebate).

Myth 4: I won’t have to pay the deductible if a claim wasn’t my fault

The Truth: If you make a claim that wasn’t your fault, such as if a third party hit you at a traffic light, your insurer usually waives your deductible if they can prove you’re not at fault. and that he is in a position to claim his costs from the third party.

However, you will be responsible for paying your deductible in advance even if you are later entitled to a refund, so be sure to select a policy with a surplus you can afford.

Myth 5: Full coverage lets me drive any car

The Truth: It’s a misconception that full coverage automatically covers you for third party liability when you drive someone else’s car. Yes, it used to be a standard feature of global policies, but it’s much less common now.

For this reason, it’s important to check your documents rather than assuming you can drive another car. Be careful with ‘drive other cars’ (DOC) in your policy.

Also, keep in mind that even if you have included DOC, you will only be covered for third party liability, so you will not be covered for damage to the car you are borrowing.

Myth 6: Young drivers should buy insurance on behalf of their parents

The Truth: Many parents want to help their children financially and might consider purchasing insurance in their name or positioning themselves as the primary driver in reducing the cost of their child’s insurance policy.

But while it may seem harmless, putting insurance on someone else’s behalf to get cheaper coverage is known as in front of. It’s illegal and has serious consequences, including penalty points, disqualification and fines of up to £ 5,000 if the case goes to court.

Myth 7: Black box policies have a curfew

The truth: Most black box or telematics policies no longer have a curfew. While this was a feature of most early black box policies, insurers have evolved and most now base premiums on driving behavior such as mileage, speed, braking, and acceleration.

While driving at night can affect your driving score on some policies, there are now very few black box policies that restrict the times of day you can drive.

Driving at night is far from the only misconception about black box policies – in fact, we’ve rounded up some myths specifically about the tech. here.

Myth 8: I don’t need to insure my car if I don’t drive it

The truth: Since Continuous Insurance Enforcement (CIE) came into effect in the UK in 2011, all cars must be insured unless they have been declared off-road with a Off-road legal notice, known as SORN.

You can RESOLVE a car only if it is not on the road on private property, such as in a car or in a garage. If it is kept on the road but never used, you should still have valid auto insurance.

Myth 9: Paying monthly is an inexpensive way to spread the cost of coverage

The Truth: While it may seem wise to spread the cost of insurance with monthly payments, it almost always costs more in the long run.

Most insurers will charge an initial deposit along with interest, which will dramatically increase the cost of your premium over the year. While it can be difficult to find the money for one-year coverage in advance, paying all at once is usually much cheaper.

Our guide to annual and monthly payments explains more.

Myth 10: It’s better to let my policy renew automatically every year

The Truth: There is no price to sticking with when it comes to auto insurance because you can often find a cheaper deal by to shop. You might be tempted by the convenience of letting your insurance policy renew, but it could cost you money.

About Marion Alexander

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