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The 4 Myths You May Have Heard About Auto Insurance

by Rick Mcguinness

The damages and losses that can result from automobile accidents can be devastating, and many individuals may find that it is impossible to financially recover from these incidents if they lack the appropriate insurance. Unfortunately, well-meaning individuals can be misled when they are buying insurance as a result of believing incorrect notions about these policies. Here are four common myths about auto insurance and the real facts surrounding them.

Myth #1: Auto Insurance Will Always Cover the Medical Costs Resulting from an Accident

Medical treatment costs can be massive, and while most auto insurance policies do provide some degree of coverage, the limits on this coverage can be extremely low for standard policies. Once this coverage is maxed out, you may be personally liable for paying for the medical costs the accident victims incur. By thoroughly reviewing the medical coverage sections of your policy, this will make it easier to determine whether you would benefit from supplemental medical coverage.

Myth #2: You Will Have No Out-of-Pocket Expenses When Filing an Insurance Claim

While an insurance policy will shield you from many of the expenses that can follow an auto accident, there are some costs that you will be responsible for paying. In particular, every policy will have a deductible that must be reached before the insurance starts to pay for damages or claims. Balancing the cost advantages of a high-deductible plan with the difficulties of paying this deductible when a claim needs to be filed can be challenging. However, individuals will often find that opting for the lowest deductible policy that they can afford is often the best choice as it is impossible to forecast what your financial situation will be when an accident occurs.

Myth #3: The Coverage of Your Auto Insurance Will Always Apply to Rental Vehicles

Depending on the details of your auto insurance policy, its coverage may transfer to rental vehicles that you drive. However, this is not a universal type of coverage, and the insurance contract should be consulted prior to renting a vehicle to determine whether you need to purchase a temporary insurance policy for the rental period.

Myth #4: Your Auto Insurance Will Pay for the Damages You Have Suffered in the Accident

An important things drivers should understand about liability-only insurance coverage is that this protection is designed to only cover the damages that you cause with your vehicle. In other words, these policies will not pay for the damages that you incur from these incidents. It is possible to have insurance that will pay for the damages that you suffer, but you will need to choose a comprehensive policy rather than a liability-only option.

Consider these tips when you're looking for a new or updated auto insurance policy.