Six Common Insurance Myths

We don’t know how some urban myths get started nor why they are so common, especially when it comes to important matters like car insurance! Below we’ve debunked six of the most common car insurance myths.  

Do Not Report An Accident And Keep Your Rates Low

Myth: Don’t report accidents to your car insurance company. Don’t file out a claim with your insurance company, prevent them from finding out about it and your rates will not increase.

Always report an accident. Nobody likes higher car insurance rates, but if you get into an accident this may just be an inevitability you’ll have to endure. If  you’re issued a ticket, for example, this ticket may appear on your driving record, automatically triggering an increase in your car insurance rates. Or if you get into an accident with another driver, that other driver may file a claim for damages or injuries and their insurance company may file against you and your insurance company. See? Like we say it’s not always possible to prevent that rate increase.

Car Insurance Rates Get Higher As You Age

Myth: Because older drivers are more likely to get accidents, as a result of poor eyesight or reflexes, often insurance companies will set higher insurance rates for drivers who are older.

Older drivers do not fret just yet!  Age does factor into how expensive your car insurance rates are, but not always negatively for older drivers. Drivers over 55 years old may qualify for reduced car insurance rates! It all depends on your car insurance company, your driving record and your credit history.

Credit Rating Does Not Affect Car Insurance Premiums

Myth: Insurance companies cannot view or use your credit rating to determine your car insurance premium rate.

This one depends on where you live. Many states allow insurance companies to view and use your credit history to determine your rates. In these instances, insurance companies consider your credit history as an indicator of how likely you are to pay off your debt and also sometimes even how likely you are to get into an accident. 

Red Cars Are Very Expensive To Insure

Myth: Think twice before you purchase a red car. Red cars are more expensive to insure.

How do people make up this stuff? Red cars are not guaranteed to be more expensive to insurance. The color of your vehicle does not affect the cost of your insurance rate. What factors do influence car insurance rates? Your vehicle’s engine size, make, model, engine size, age, the owner’s/driver’s age, the owner’s driver’s record and the owner’s credit history.

If Your Car Is Destroyed, Your Insurance Company will Pay Off Your Entire Loan

Myth: If you get in to an accident and your car is destroyed in the process, your car insurance company will pay off the entire loan you took out for your car.

Your car insurance company will pay off the fair market value of your vehicle. The “fair market value” is the original cost of your car. Oftentimes, the  balance on oyur car loan will be more than the original cost of your car. So while your car insurance company can help pay a good amount of your car loan, you will still be responsible for paying off the difference.

Always Buy From A Dedicated Car Insurance Agent

Myth: The only way to acquire the lowest insurance rate is purchasing insurance from an insurance agent who works for a large insurance carrier.

You aren’t always guaranteed to get the lowest insurance rate if you buy from a large insurance carrier. When looking to find the lowest, cheapest but still efficient car insurance discuss your options with multiple companies. Do your own price comparisons or work with an independent insurance agent, who has experience dealing with highly rated insurance companies. Remember to research and stay patient, you’ll eventually find the right rate for you. 

by Abby on July 25, 2015