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The list compiled below contains some popular auto insurance myths.  Many drivers regard these myths as actual realities.  The truth behind these myths might just bring about a metamorphosis in the way you behave next time you want to burn some rubber.

• The cheaper the vehicle, the cheaper the auto insurance

This is only a half truth.  If a cheap vehicle is an unusual model or has a large engine, it might cost even more to insure than a more expensive small vehicle.  However, comprehensive insurance, which covers damage caused by fire, hail, vandalism, or animals, will be less for a cheap vehicle.

• Auto insurance rates are higher for smokers than for non smokers

Your auto insurance rate will not be higher if you smoke.  Auto insurance companies do not even as if you smoke when preparing a quote.

• Colour of the vehicle affects auto insurance rates

Colour plays no role when auto insurance rates are calculated.  Colour of the vehicle is not even mentioned when preparing a quote.  Factors that do play a role include age of the vehicle, its engine size, body type, model, and make of vehicle.

• If my friend is in an accident with my vehicle, his insurance will pay for damages

If it is your vehicle, it is your responsibility.  Your friend’s insurance (if he has any) will only act as excess insurance if the damages exceed the limits of your own auto insurance policy.

• My credit score does not effect my auto insurance rate

Your credit score is very important in relation to the amount of auto insurance you pay.  Your credit score is always taken into consideration when your auto insurance is calculated.

• No-fault  insurance means it’s not my fault

This could be quite misleading.  No-fault insurance only means that your own insurance company pays for the bills of your injuries, no matter whose fault it actually was.

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People are always looking for loopholes which they can use to lower their vehicle insurance.  If there are a means through which one can pay lower vehicle insurance premiums, why not use it?

Find below a list of these vehicle insurance loopholes:

• If at all possible, give an address of some small town in the Karoo; chances are that your vehicle insurance might be as much as 20%-30% lower than if you lived in a big city.
• Store your vehicle in a locked garage, with CCTV camera present.
• Install an alarm system and immobiliser in your vehicle.
• Increasing the value of your vehicle, rather than decreasing it, will lead to lower vehicle insurance rates.
• State that you are married, even if you are single.
• Young drivers should insure their vehicles in their parents’ name.  However, this in turn will cause that they will be unable to build up a no-claims discount in their own name.
• Put on your father and mother as second and third drivers.
• If you get good grades at college, you might be able to qualify for good grade discounts.
• Two years without any claims will bring you into contention for a good driver’s discount.
• Being named a driver on the policy will bring about a cheaper premium if your vehicle is on someone’s name with a five year no-claims record.
• Having a lower risk job (such as an office worker) will mean lower vehicle insurance when compared to someone who is on the road all day long (such as a representative).
• Name an additional mature driver on the vehicle insurance policy.
• Although it may take a while, try to improve your driving record all the time.
• Avoid purchasing vehicles which is a popular theft target.
• Try to drive less.  The number of kilometers you drive directly relates to your risk exposure.  Drive less, pay less.

You as a driver do not even want to think about filing an auto insurance claim seeing as that would mean that something happened to your vehicle.  Whether it is your young teenage driver who mistook the petrol pedal for the brake, the vehicle was vandalized, or you have been involved in an accident.  When your vehicle was damaged in some or other way, filing an auto insurance claim is the next logical step to take.  It is very important to know what to do and how to do it.  Filing an auto insurance claim is not as difficult as it might seem at first.

Below are some steps to help you file an auto insurance claim:

1.  It is of great importance to know what kind of auto insurance you have.  How your auto insurance cover the damage to your own vehicle as well as to the other vehicle (if there is any) will ultimately determine if you will be required to make an additional payment.

2.  Immediately make a call to your insurance company.  Enquire about the documents/forms that you need to submit.  These include among others the police report, medical reports, towing, and auto repair bills.

3.  Supply your insurance company with all necessary information they require.  Be sure to fully cooperate.  In the event of a claim being brought against you, your insurance company will represent you.

4.  At all times should you keep record of expenses made on your side.  Depending on the type of auto insurance policy you have in place, chances are that you will be reimbursed for the expenses incurred.

5.  You should keep the original copies of each and every document and other paperwork related to the auto insurance claim.  Copies should be supplied to your insurance company.  It is a good idea to store them in a safe, dry place, or file them.  This way you can always refer back to them in case you need to.

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Purchasing cheap vehicle insurance for your teenage driver can be more difficult than you think.  You might argue that your child only turned eighteen; however, that is precisely where the problem lies.  Because teens are still learning the rules of the road, they are considered young and inexperienced and thus a risk and potential threat to other road users. 

However, if you know where to shop, you might just be lucky and find a perfectly reasonable price for vehicle insurance.  There are several insurance comparison web sites to have a look at; they will allow you to quickly get a vehicle insurance quote for your teen.  If you are to follow this route, there are a few things you might consider while shopping for vehicle insurance for teens at a lower price

1. While on the lookout for the perfect policy, keep in mind that you can probably add your teenager to your own vehicle insurance policy.  This will be much cheaper than having your child purchase his or her own policy.

2. When on the lookout for a bargain on vehicle insurance for teens, remember to consider both the price and the package.  Be careful to not only base your purchase on the price tag alone.  You need your teen to be covered in the event of an accident.  You need to ensure that you know what you are paying for and that the policy contains all the necessary coverage.  Also consider the amount of coverage you are paying for. 

3.  Be a good role model for your teen; let him/her observe your good driving habits.  Chances are that they will subsequently learn by example.  However, the opposite is unfortunately also true.   

4. Encourage your teen driver to perform in school.  In some cases, insurance companies will offer a good scholar discount on vehicle insurance.  Whether the student is attending varsity or still in high school, if he or she has good grades, the student will be eligible for a discount.  Vehicle insurance companies base this reduction on the idea that good students are also better drivers.

- Why change to a new Vehicle Insurance Company?

Reviewing your vehicle insurance coverage on a regular basis will ensure that you are receiving the best insurance value for your money.  You will find that it is worth looking around first before making a final decision.  Depending on your location, premiums for identical policies vary widely among various vehicle insurance companies.  The reason for this price variation is due to the fact that a company’s claims experience with policyholders in a specific coverage group (such as people of similar age, number of accidents, and type of vehicle).  For example, if a large number of people in a specific coverage group files claims during a given year, chances are good that their rates will go up.  When this happens, better discounts and lower overall premiums may be available at rival insurance companies.  When you decide to switch your vehicle insurance to another company, you will find that it’s fairly easy to do so.

- How to cancel your old Vehicle Insurance Policy

Generally, all you need to do to cancel your vehicle insurance policy is to inform your insurance company in writing, specifying the date you want the policy canceled.  The normal procedure is for the new company to notify the previous company of the policy change.  Some vehicle insurance companies require the policyholder to send back the actual printed policy.  After this is done, the insurance company will send a cancellation request form that will need to be signed and returned.  Careful examination of the form will ensure that all information regarding the policy is correct.  You need to follow up on the status of the cancellation.  Never simply walk away from the old policy without formal cancellation.  Most insurance companies require that vehicle insurance policies be cancelled with notice; if not, it could hurt your credit rating and ability to get a new policy.

- Get a new Vehicle Insurance Policy first before canceling the old one

It is of the utmost importance to have a new policy in place before canceling the previous one.  If this is not done, you might have a gap in protection for a few days.  Most insurance companies require policyholders to present proof of new coverage before they will cancel an active policy.  The new company will be able to time the beginning of the new policy to coincide with the cancellation of the prior coverage.

Saving money wherever it is possible is important to all of us.  Auto insurance should be no different.  You as a driver should take advantage of all discounts that many insurance companies offer; discounts that can significantly reduce the cost of auto insurance.  Understanding how discounts can affect auto insurance premiums can help you make better decisions about your coverage and possibly save yourself some money in the process.

Find below some information that will help you to identify possible auto insurance discounts.

- Keep in mind that the type of vehicle you buy could greatly affect your premium.  A flashy sports car is usually going to cost more to insure than something small yet economic.  This is also true of vehicles that are on the list of most stolen. 

- Some insurance companies will give you a discount for having more than one car.  If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three to five years then you could be eligible for a safe driver’s discount.

- Certain insurance companies will reward you for staying with them for many years without any accidents reported.  They will subsequently offer you a renewal discount.  Due to the fact that you have carried insurance with a company for a number of years, and have not had an accident, the insurance company wishes to reward you and keep doing business with you. 

- If it happens that you change from insurance company, a proof of prior insurance discount will most likely apply.  Many insurance companies request at least 6 months of consecutive insurance from the previous insurance company. 

- If you own an older car, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage.  By comparing the book value of your vehicle and the premium that the insurance company offers, you may find that it cost as much for the insurance as it does for the vehicle.  Thus, chances are that you will spend more insuring it than it is actually worth.

- If you are a full-time student with good grades and are unmarried and usually under 25 years of age, you could be eligible for a good student discount.  The same principle applies if you own a home that is used as a principal residence.

- If your vehicle is equipped with an anti-theft device, chances are that a discount could apply.

Your vehicle insurance premiums are calculated by a number of different factors relating to your insurance risk.  These factors determine the premium that you are charged on either an individual or collective basis.  It is important to be aware of these factors in order to allow you to do something about changing things so you can benefit from lower premiums.

• Verifiable Driver Insurance History

One of the things that an insurance company will look at is your insurance history.  How long you have had insurance for?  What is your claims record like?  Is the car insured under your name?  It may happen that you have been insured for a long time but that the insurance has been under your parents’ or spouse’s name.  Unfortunately this does not count as verifiable insurance history.  This means that insurance companies may think twice before providing you with insurance coverage.  It is well-known that if you have had several claims in a short space of time, you will be paying a higher premium than someone who has a claim-free record.

• Make and Model of Car

Two basic aspects of risk are affected by the make and model of your car.  First, the theft risk.  If your vehicle is considered as a highly desirable vehicle, it will therefore be considered a high theft risk.  The second risk is accident risk.  If the vehicle is capable of high speeds, it is considered as a high risk level car.

• Overnight Storage of Vehicle

This factor is connected to the theft-risk factor.  It varies between different residential areas.  Generally speaking, urban areas have a higher risk when compared to rural areas.  Insurance companies prefer that a vehicle is parked off the street, behind a locked gate or in a locked garage.  A vehicle that is stored in a garage as opposed to being parked outside will require less maintenance and therefore benefit from lower insurance premiums.

• Gender of Driver

Men are considered far higher-risk drivers and involved in accidents far more frequently than women.  They are also involved in far more serious accidents due to traveling at high speeds.  Female drivers can benefit from discounted premiums; men will only receive lower premiums if they have a good driving track record.

• Age of Driver

Most insurance companies do not insure drivers under the age of 21 because they are a much higher risk group. Having just learned to drive, younger drivers generally drive faster, are less aware of other vehicles on the road, and often do not judge distances very well.

• Vehicle Security Systems

Most modern vehicles have factory-fitted security systems.  Some use immobilizers and others use alarms systems.  If it is a desirable and high-theft risk vehicle then insurance companies may insist on having additional security systems such as vehicle tracking installed in the vehicle.

A lot of auto insurance companies consider your credit information when determining your insurance premium.  Thus if you are on the lookout for new auto insurance, keep in mind that many insurance companies are looking at your credit history to determine your auto insurance rates.

The main reason why some insurance companies use credit information is because they feel there is a direct link between a consumer’s credit history behaviors and expected claims that may occur.  For this reason, they feel that people with a good credit behavior are less likely to suffer insurance losses than those with a bad record.

While some insurance companies will research your credit reports when determining your rate, others will use what is known as an insurance credit score.  An insurance credit score is put together by using statistical techniques and methods to predict the chance that a consumer will have higher than anticipated losses.

Insurance companies use many factors to determine your credit score.  Below are listed some examples of these factors:

• Past payment history: the number and frequency of late payments and the days between the due date and late payment date.
• Length of credit history: the amount of time you have been in the credit system.
• Unused credit: how much you owe compared to how much credit is available to you.
• Inquiries for credit: the number of times you have recently applied for new credit, including mortgage loans, utility accounts, and credit card accounts.
• Number of open lines of credit: the number of credit cards, whether you use them or not.
• Type of credit in use: major credit cards, store credit cards, finance company loans, etc.
• Public records: bankruptcy, collections, foreclosures, liens, charge-offs, etc.

It is very possible that your insurance credit score may be very different from one company to the next.  This is put down to the fact that different insurers use different factors to determine your premium..  Take note that even though it is called an insurance credit score, it includes numerous factors of which credit is only one.  Since each insurance company uses different techniques to determine your credit score it is hard to predict what a good credit score is.  Most of the time a good credit score will result in lower premiums.

Your insurance company can decide whether or not to tell you what your credit score is.  You might be surprised that they do not even know what it is in some cases.  All they usually know is if your credit score qualifies you for a specific rate/policy or not.  Some companies also offer better rates under each qualifying tier.

If you have taken the steps to improve your credit score you should ask your insurance company to re-evaluate your credit score at renewal.