10 Myths About Car Insurance
Know What Really Matters When Getting Auto Insurance
Myth #1: The color of your car matters
Many people believe that a red car means you will pay more for your car insurance policy. While insurance companies take several factors into account when determining the cost of auto insurance, the color of the car isn’t one of them. Relevant factors include: car make, model, body type, engine size, age of vehicle, sticker price, cost of potential repairs, safety record, chances of theft, etc.
Myth #2: Auto insurance gets more expensive as you get older
Actually, auto insurance might get less expensive the older someone gets. A couple of reasons include:
- People who are 55+ can take an accident prevention course to get a lower auto insurance rate
- Those who are retired or only work part-time tend to drive less, so they might be able to get a car insurance discount
The programs and discounts available will vary in each state and with each insurance company, so make sure you ask your insurance agent if you are eligible for a lower insurance premium.
Myth #3: Auto insurance is always more expensive for men
If a male and female are the same age and live in the same area, it’s not necessarily true that the male will pay more for auto insurance. There are many other variables an insurance company will consider that will affect the cost of insurance. These include:
- Driving history
- Credit report
- Education
- Vehicle type
- And more!
Myth #4: Your credit history doesn’t matter
Insurance companies might use your credit history to determine how well you manage your finances and therefore how likely you are to file an insurance claim. Generally, people with good credit often pay less for their auto insurance policy.
Myth #5: Auto insurance coverage extends to theft, vandalism, and damage due to the environment
A standard auto insurance policy does not necessarily cover these types of circumstances. To get extended coverage, you should purchase comprehensive and collision coverage as well. It is not always worth the cost of these additional coverages if your car is not worth much, but you will need them if you want full coverage for your vehicle.
Myth #6: The minimum auto insurance for liability required by the law is good enough
If you only have the minimum car insurance coverage that the state requires, you will likely pay significant out-of-pocket costs in the event of an accident. If you have personal financial assets you need to protect, then you should consider a more comprehensive auto insurance policy in the event the other driver files a lawsuit against you.
Myth #7: If someone else drives your car, then their auto insurance policy will cover damages in an accident
While the laws differ in each state regarding this, most states require that the auto insurance policy covering the vehicle is the one that provides coverage in the event of an accident, no matter who the driver is. Make sure you check with your insurance company so you understand the rules in your state.
Myth #8: People in the military pay more for auto insurance
Actually, the opposite is true. Some auto insurance companies provide a discount for those in the military or formerly in the military. Check with your insurance company to see if you and your family qualify for this discount.
Myth #9: Your personal auto insurance policy will cover you when you drive your car for business
If you use your car for business purposes, then you will probably need to have a business auto insurance policy so that you are covered in all circumstances. Additionally, if you have employees that drive your car, you should keep updated on their driving record.
Myth #10: The cost for auto insurance increases if you get a ticket or get in an accident
While multiple traffic tickets can affect your insurance rates, getting a single ticket won’t necessarily make an impact as long as your overall driving record is clean. Additionally, some states have classes that you can take to remove the points that tickets add to your driving record.
When it comes to car accidents, whether or not your premiums increase will depend on the severity of the accident and who is at fault. For example, if you are at fault for an accident and the insurance claim includes the damages for other vehicles and the injuries of other people, then your insurance cost will probably go up. However, if you back-up into a tree or light pole and only cause damage to your own car, it’s possible there won’t be any increase in insurance costs.
Let James Grace Insurance Help You Get the Car Insurance You Need
There are many opinions and thoughts out there regarding auto insurance policies and the various factors involved in the cost of insurance premiums. Some are true, and some aren’t. Speak with your insurance provider to make sure you understand all of the variables used to determine your insurance costs, and double-check to see if you are eligible for any discounts. Feel free to contact James Grace Insurance if you have any questions! As an independent insurance agency in Arizona, we can help you get the best policy for your needs at the most affordable cost. Learn more today!