Dispelling Car Insurance Myths For First Time Car Owners

Car insurance is a legal necessity for all vehicle owners in the United States. It is important for first time car buyers to understand how insurance works. Dispelling car insurance myths can ensure that they get the best value for their money.

1. Liability Insurance

Insurance sales people work on a commission basis which means that they will sell you the most expensive cover possible in order to maximize their profits. The law only requires that you have basic liability insurance.

Liability insurance will only cover injuries or damage to property of another person (third party) in a specified amount. Any damage to the insured person’s vehicle or injuries sustained will not be covered. The insured vehicle will also not be covered for theft or damage that is not related to an accident.

2. Accidental Cover

Both parties losses and medical expenses can be claimed for in the event of an accident with accident insurance. However, the amount of cover depends on the type of policy. In other words, only the amount specified in the policy will be paid and any additional expenses will need to be covered by the person at fault.

3. Theft Cover

Unlike household insurance, car insurance will only pay for the actual value of the car if it is stolen and not the replacement value in the form of a new car. However, you can opt for more expensive cover that will provide you with a higher payout than the value of your car.

4. Additional Driver Insurance

Car insurance will only cover claims for the valid driver of the car. A driver must be specified in the insurance documents and any other person driving the car in the event of an accident will not be covered. Additional insurance can be taken to cover other driver’s. However, additional driver’s will also need to be stated in the policy document.

5. The Rate

First time car owners are likely to pay a higher insurance premium. It is important to inform the insurance company of previous driving experience and the age of the driver as this could lower the rate that is charged. If you have been in accident, you may be required to pay an excess and it could also result in an increase in your premium.

Reading the terms and conditions of an insurance policy carefully is an important step to take in dispelling car insurance myths.