Car insurance myths you should know

1. If I lend my car to a friend and the friend wrecks my car, his insurance will pay. This will depend on the state you live in. Some states require the friend to drive the vehicle to repay the insurance company if the vehicle is damaged due to their fault.

2. I can not auto insurance after the accident and I’ll be covered. Insurance is designed to cover contingenciesaccidents. This philosophy can be compared to buying a lottery ticket after the figures were announced and expect to win.

3. My loan will be reimbursed if my car is reached. As mentioned earlier, most insurance policies will pay only the cash value of the vehicle, which is defined as what the car cost new less depreciation. If you owe more money to the lender that the actual cash value, you may well end up paying on a vehicle that isno longer drivable.

4. If I have any personal property in my car, my car insurance cover. Automobile insurance is designed to cover the car, and not personal property in the car. Personal property in the vehicle can be covered on a policy of tenants or owners.

5. I do not want my business to teen about my contract because I do not want to be held responsible if they get an accident. Parents are responsible forthe actions of their children. The automobile insurance policy does not create liability, it provides coverage to the parent for that responsibility. If the young person is not insured, the parent will always be responsible for accidents they cause.