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Myths could negatively affect important auto insurance decisions

Unfortunately, not everyone makes the smart choice to purchase auto insurance. Others fail to get coverage that is appropriate to their needs. So what could cause motorists to make mistakes in regard to purchasing coverage?

Perhaps part of the problem is that motorists are misinformed about what auto insurance does and does not cover. A recent survey conducted by a cost-comparison website revealed that many people hold beliefs about insurance that are simply untrue. One thousand adults were polled, and the results show that many thought the following:

  • If a vehicle is totaled out, the policyholder is compensated only for the dollar amount of the scrap metal.
  • Auto policies will cover bills for mechanical repairs.
  • Auto policies will cover the costs of things stolen out of vehicles
  • Auto insurance will not cover policyholders who are responsible for accidents.

The last item on this list is particularly troubling. If people believe they won't be covered if they cause an accident, they have much less motivation to purchase insurance. And of course, when a motorist who does not have insurance causes an accident, it is usually left to the other party or parties to pay for the damages.

So it would appear that there is some work to be done in educating the public on how auto insurance works and why it is so important that all vehicles be covered. In the meantime, motorists who have insurance may want to add uninsured and underinsured driver coverage to their policy.

But occasionally, insurance companies do not want to fully compensate policyholders who are in accidents caused by uninsured drivers. This can be true even if the policyholder has the right coverage.

If you have been in a collision with an uninsured driver, you may wish to have a motor vehicle accident attorney assist you with filing the claim. Insurance companies will frequently pay claims with less resistance if they know the policyholder has legal representation.

Source: Cars.com, "Survey Exposes Common Car Insurance Misconceptions," Matt Schmitz, Sept. 21, 2015

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