If youâ€™re 25, male, and drive a red, 2-door sports car youâ€™re going to pay the highest insurance rates, right? Maybe not. Auto insurance can be very confusing if you are not familiar with the industry. Today weâ€™ll go over some of the most common myths about auto insurance.Â
- Â â€œI pay higher rates because I have a red car.â€ Not true. The color of your car has NO affect on your auto insurance rates. However, the vehicle make, model, year, body type, and engine size will have an impact.
- â€œMy friend was driving; his insurance will cover the damages.â€ Nope. Youâ€™re on the hook. Itâ€™s your car and itâ€™s your responsibility. Insurance follows the the car, not the driver. If your coverage is not enough, then, your friends insurance will cover the rest.
- â€œMy personal policy will cover all uses of my vehicle.â€ False again. A personal auto policy will cover your personal driving needs, but nothing related to work. If youâ€™re a realtor or you deliver pizzas, you will need to purchase a commercial policy.
- Â â€œMy rates wonâ€™t go up if I donâ€™t report the accident to my insurance company.â€ Maybe.Â Although you may have not reported the accident to your carrier, the other person involved may have reported it to theirs. As a result their company may inform yours about the accident, leading to an increase in premium. Additionally, the accident may appear on your motor vehicle record and follow you for at least three years.Â You are required by the terms of your policy to report all accidents to your insurance carrier, and all accidents with damages totaling $750 or greater and all injury accidents to the Department of Motor Vehicles.
- â€œThe police said it wasnâ€™t my fault.â€ Just because the police said you were not at fault, doesnâ€™t mean the insurance companies will agree, at least in whole. Insurance companies use comparative negligence to assign partial risk to both drivers in an accident where they believe no one is solely at fault.
- â€œI just got my first speeding ticket and now my rates are going to skyrocket.â€ Not necessarily. Many auto insurance companies will not raise your rates from your first speeding ticket. However, if you rack up 2 or 3, you can bet youâ€™ll see an increase.
- â€œAre my parking tickets going to affect my rates?â€ No. Parking tickets do not count against your driving record; but unpaid parking tickets can affect your ability to renew your driverâ€™s license.
To find out more answers to common question about auto insurance, click here.