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Pam's Insurance Site

When I bought my first house, I was already going into a lot of debt. I didn't have the money to seriously insure it, so I bought only the bare minimum without consulting an insurance professional. That was a big mistake on my part. It could have turned out alright. That is, if my house hadn't been in the path of a huge storm. Huge gale winds knocked a tree down straight through my roof. My house was practically destroyed, and my minimal policy didn't cover nearly enough. I spent years and years trying to get myself out of that financial mess. Since then, I have always been very cautious in learning about insurance and talking to the real professionals.

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Avoid These Common Misconceptions About Car Insurance

If you're in the market for car insurance or you're just comparing companies and quotes, you need to get your facts straight. You certainly don't want the kind of car you get or how much you spend on premiums to be based on the wrong information. Here are some common misconceptions about car insurance so you can make an informed decision about what kind of policy is best for you.

Red Cars Cost More to Insure

This has been a myth for some time, and it's likely due to the urban legend that red cars get pulled over more often by police. The truth is, red cars are not any more expensive to insure than the same car of a different color.

What kinds of cars are more expensive to insure?

1. Smaller, sporty cars—because they tend to be driven by younger, higher-risk drivers, and they're more likely to be involved in car accidents.

2. Expensive cars—because they cost more to repair and replace.

3. Thief magnets—because if your car is a magnet for thieves, it is more likely to be stolen. You can check the Kelley Blue Book website for a list of commonly stolen vehicles. They claim that about one-third of your premium goes towards paying for theft coverage. 

Keep in mind that there are many other factors that determine the cost of your insurance, including your age, where you live (urban vs. rural), whether or not you have teens living in the home, and your credit score. The best way to save the most on car insurance is to shop around and get a list of quotes.

Anything Stolen Inside Your Car is Covered

If you have a habit of leaving expensive personal items in your car, you may want to start keeping them at home or at least carrying them with you.

Out the following items that are likely to be stolen from vehicles—stereos, cell phones, laptops, wallets, purses, and small, handheld electronic devices—the only one likely to be covered by your insurance is the car stereo, and that's only because it's considered a permanent attachment. Even so, there's no guarantee you'll get a check if someone breaks into your car and steals your stereo. The only way to know for sure is to check with your insurance company.

How can you get your personal property inside the car covered?

If you have a comprehensive policy, some of your things may be protected in case of theft. But again, it's not likely. Believe it or not, the best way to protect your personal belongings inside your car is with homeowner's or renter's insurance. Most policies will require proof that you owned the item that was stolen, usually with a receipt of purchase. Talk with your homeowner's or renter's insurance carrier to find out the specifics.

If a Friend Wrecks Your Car, They Have to Pay

This one can get a little tricky, but suppose one of your buddies or relatives is in town, and they want to borrow the car while you're at work. They end up causing an accident, which results in damage to both your car and the other driver's.

You may assume that even though it's your car, your friend's insurance company will pay for the damages. They were the ones driving, after all.

Unfortunately, in most states, insurance policies cover the car, not the driver. The only exception to this is liability insurance, which is required in almost every state and follows the driver.

Liability insurance covers damage and injuries to the other driver and car, not yours. And there are limits to the amount it will cover, depending on the policy. As a result, if your friend wrecks your car and it's their fault, you will probably be the one responsible for paying for damages to your vehicle.

How can you make sure it's okay to let others drive your car?

Call your auto insurance carrier and find out what will happen if someone else drives your car. Sometimes they will allow it, covering minimal costs in case of an accident. This is particularly true if the person driving is a family member. Other times it's strictly forbidden unless they are on your policy, and you will be held responsible if someone else damages your car while driving it.