MYTHS AND REALITIES OF CAR INSURANCE.

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LIFE IN AMERICA

The color of an automobile influences how much it costs to insure it. Comprehensive coverage protects drivers in all situations because, after all, it is "comprehensive." Car insurance companies can charge whatever they want. Have you ever thought one or more of these statements to be true? You are not alone. A survey conducted by DriveSM Insurance, Mayfield Village, Ohio, from The Progressive Group of Auto Insurance Companies, finds many drivers accept common car insurance myths as true. Here is a sampling:

Myth: Car insurance companies consider vehicle color when determining rates. Fact: Color is not a factor. Information that is used includes the vehicle's year, make, model, body type, and engine size, as well as data about the driver.

Myth: Car insurance rates are not regulated and insurance companies can charge whatever they want. Fact: Each state has regulators who review the information companies collect as well as the rates they charge; insurers cannot deviate from those rates.

Myth: Comprehensive coverage protects drivers in all situations. Fact: Comprehensive coverage is one type of protection available. It only pays for damage caused by an event other than a collision, such as fire, theft, or vandalism; it also covers weather-related (e.g., hail, flood) damage; and damage caused if a vehicle collides with an animal. Moreover, it provides a rental car if a vehicle is stolen.

Myth: Rental reimbursement coverage protects drivers who crash their rental car while on vacation. Fact: This coverage pays for the cost of a rental car if a driver's personal car is in the shop as a result of an accident and he or she needs a replacement vehicle.

Myth: Bundling insurance coverage always results in a cheaper rate. Fact: Just because a driver buys more than one product from the same insurance company does not always mean he or she is getting the best rate available. In many cases, there are savings to be had by talking with an independent agent or broker who can create a custom insurance package with policies from competing insurance carriers.

Myth: Car insurance rates go down dramatically when drivers turn 25. Fact: Young and older drivers typically have the most car crashes and different car insurance companies' customers have different claims experiences. When developing an auto insurance rate, insurers generally consider a variety of items about drivers in addition to age, including information about the vehicle, past claims history, and the claims experience for other customers like them. One or more of these pieces of information could lead to an individual getting a higher, lower, or the same rate when he or she turns 25.