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4 car insurance myths busted

Neither age (unless a male driver under 25 years old) nor the color of your car have anything to do with how much you pay in insurance.

When buying insurance for your vehicle, it pays to know the difference between fact and fiction.

Check out these five common myths about vehicle insurance:

Myth 1: Color determines insurance price

Color doesn’t matter, but the type of vehicle does. Call your insurance company while at the dealership to find out how much it will cost to insure a car before buying it. Rates are based on make, model, body type, engine size, the vehicle’s age, driving record, credit history of the driver, likelihood of theft, overall safety record, sticker price and repairs.

Myth 2: Age and military status increase premiums

Actually, the truth is just the opposite. Drivers older than 55 typically qualify for a reduction in rates if they’ve finished an accidental prevention course. Check with your provider. Military personnel should take documentation that includes name, rank and the time served in the military. Insurance companies use that information to figure out the length of a military discount. Former military members and their families are sometimes eligible.

Myth 3: All insurance covers criminal acts or acts of God

Collision and comprehensive coverage fully protects a vehicle from all types of damage, but insurance companies offer them as optional coverages. If you’re making car payments, lenders require collision and comprehensive coverage. But once a car is paid off, some drivers drop comprehensive and collision coverage to save money. Buying the optional coverages might not be cost-effective if the vehicle is worth less than $1,000 or less than 10 times the insurance premium.

Myth 4: Minimum liability coverage is enough

The likelihood is that an accident costs more than the minimum amount covered by liability insurance. The difference could come out of your pocket. A minimum of $100,000 of bodily injury protection per individual and $300,000 per accident is recommended by consumer groups and the insurance industry.

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