Car Insurance contracts can be very complex. They often come with a great deal of fine print and technical terms. So, it’s no wonder that many people end up learning what they know about Car Insurance from other consumers. Unfortunately, a lot of the information passed around about Auto Insurance is incorrect. Below are some of the most common myths about Car Insurance.
1. My Driving Record is the Only Factor Insurance Companies Consider
There are actually a number of variables that go into determining your Car Insurance premium. While this does include your driving record, other factors considered are:
- Age/driving experience
- Make and model of your car
- Your zip code
- Your credit score
Every state and Auto Insurance company has their own formula for calculating risk. That’s one of the reasons why it’s a good idea to shop around for Car Insurance.
2. Having a Good Driving Record Will Lower My Premium
You might have 20 years of good driving under your belt and expect your Auto Insurance premium to go down. However, like mentioned above, there are many factors that go into determining your Car Insurance rate. Even with so many years of driving experience, if you live in a crowded city or area with a high auto-theft rate, your rate may not decrease. Some ways you can lower your Car Insurance premium are:
- Moving to a neighborhood with a higher safety rating
- Bundling your insurance policies under one carrier
- Shortening your commute to and from work
- Buying a car with advanced safety features
3. The Color of My Car Influences Your Car Insurance Rate
Many people incorrectly believe that a red car will cost more to insure because it stands out more and therefore is more prone to theft and vandalism. You may also assume that a black or gray car will cost less to insure because it blends in with everyone else. However, the color of your car does not affect your Auto Insurance rate at all. Typically, only the make and model of your car will be a factor in determining your premium.
4. Smaller Cars are Cheaper to Insure
Smaller vehicles tend to take more damage in car crashes. That means that they’re more likely to be declared a total loss versus a larger car. For this reason, small cars are not necessarily cheaper to insure. Also, some smaller cars may not have the safety equipment of larger vehicles. Safety features matter more than car size when determining your Car Insurance rate.
5. If I Still Owe Money on My Car Loan, My Car Insurance Will Pay for it
Some people incorrectly assume that if their car is totaled in an accident, their Auto Insurance carrier will pay for it, including the amount you still owe on it. Unfortunately this is not true, unless you have Gap Insurance which is an additional coverage you must specifically add to your policy. Without Gap Insurance, your Car Insurance company will only pay you what the car was worth, up to your policy’s limits.
6. An Older Car is Less Likely to be Stolen
On the surface it seems logical that car thieves would try to steal a more valuable, new car. However, older cars tend to be frequently targeted because the security on older cars is usually weaker and lower-tech than on a new car. Additionally, there is a big market for the parts of old cars which also make them more of a target.
7. Car Insurance Companies Can Cancel My Policy at Any Time
Without a compelling reason, Car Insurance companies cannot cancel your policy and must fulfill their end of the insurance contract. An example of a compelling reason would be if you committed insurance fraud.
8. If My Car is Stolen, the Contents Inside Are Covered
Unfortunately, items inside the car when it is stolen are not covered by your Auto Insurance. However, if you have a good Home and Contents Insurance policy, you might have coverage if one of your personal items is lost when the car is stolen.
9. Drivers of Fast & Expensive Sports Cars Pay More for Car Insurance
Like we said above, Car Insurance is complex. Your car isn’t the only factor that determines the cost of your Car Insurance premium. For example, let’s say you’re a 40-year-old driver who owns a sporty Mercedes-Benz coupe. You also have an impeccable driving record. That could mean you have a cheaper premium than a 21-year-old driver with a recent at-fault accident on their driving record, even if they drive an old 2008 Toyota Camry.
Speak with an Insurance Specialist
Basically, don’t believe everything you hear about Car Insurance. Everyone’s premium is different and as you can see, that’s because of very many reasons. Therefore, the best way to find great coverage at a price that’s right for you is to call an AIS Insurance Specialist at (855) 919-4247. They will compare rates from multiple top companies and provide you with a free quote in minutes. Pretty easy, right?
The information in this article is obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements. It should not replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here. Such policy will be governed by the language contained therein, and no warranty or appropriateness for a specific purpose is expressed or implied.