What’s True And What’s Not About Auto Insurance?
Auto insurance is an extremely important part of responsible car ownership…providing financial protection and peace of mind in the event of an accident or other unexpected events.
However, there are many myths out there about auto insurance that can lead to confusion and, in some cases, expensive mistakes.
So what’s true and what’s not?
- Myth 1: Red Cars Cost More to Insure
- Truth – One of the most common auto insurance myths is that red cars are more expensive to insure. In reality, the color of your vehicle has no bearing on your insurance premium whatsoever. Auto insurers base their rates on factors like
- your driving history
- the make and model of your car
- your location
- your age
- Truth – One of the most common auto insurance myths is that red cars are more expensive to insure. In reality, the color of your vehicle has no bearing on your insurance premium whatsoever. Auto insurers base their rates on factors like
Myth 2: Minimum Coverage is Sufficient
- Truth – Many people believe that purchasing only the minimum required auto insurance coverage is enough to protect them adequately.
- While minimum coverage may meet legal requirements, it often falls short in providing good comprehensive protection.
- In the event of a severe accident, you could be left with significant out-of-pocket expenses.
- It’s essential to evaluate your insurance needs and consider options beyond the minimum to ensure you’re adequately insured
- Truth – Many people believe that purchasing only the minimum required auto insurance coverage is enough to protect them adequately.
- Myth 3: Your Credit Score Doesn’t Affect Your Premium
- Truth – Your credit score can indeed impact your auto insurance premium. Insurers often use credit-based insurance scores to assess risk.
- A lower credit score may result in a higher insurance premium, while a higher credit score can lead to a lower premium. Maintaining good credit can help you save money on your auto insurance.
- Truth – Your credit score can indeed impact your auto insurance premium. Insurers often use credit-based insurance scores to assess risk.
- Myth 4: Full Coverage Insurance Covers Everything
- Truth – While “full coverage” sounds comprehensive, it doesn’t mean your insurance policy covers every possible scenario.
- It typically includes collision and comprehensive coverage, but even these have limits and deductibles.
- You may need additional coverage for specific situations, such as:
- rental car reimbursement
- uninsured motorist coverage
- gap insurance.
- Review your policy and discuss any gaps in coverage with your insurance agent.
- Truth – While “full coverage” sounds comprehensive, it doesn’t mean your insurance policy covers every possible scenario.
- Myth 5: Personal Auto Insurance Covers Business Use
- Truth – If you use your personal vehicle for business purposes, it’s a common myth to assume your personal auto insurance policy provides adequate coverage. In many cases, it doesn’t.
- You may need a separate commercial auto insurance policy to protect your business activities adequately.
- Failing to do so could result in denied claims and legal complications.
- Truth – If you use your personal vehicle for business purposes, it’s a common myth to assume your personal auto insurance policy provides adequate coverage. In many cases, it doesn’t.
Myth 6: The Insurance of the Car Owner Covers All Drivers
- Truth – Another common myth is that the car owner’s insurance will cover any driver of the vehicle. In reality, auto insurance generally follows the vehicle, not the driver.
- If someone else is driving your car and gets into an accident, their insurance (if they have it) will be the primary coverage, and your insurance may come into play if their coverage is insufficient.
- Truth – Another common myth is that the car owner’s insurance will cover any driver of the vehicle. In reality, auto insurance generally follows the vehicle, not the driver.
- Myth 7: You’re Automatically Covered When Renting a Car
- Truth – Many people believe that rental cars come with automatic insurance coverage, especially when using a credit card for payment.
- While some credit cards offer rental car insurance as a perk, it often comes with limitations and may not provide comprehensive coverage. It’s essential to read the terms and conditions of your credit card’s rental car insurance and consider purchasing additional coverage if necessary.
- Truth – Many people believe that rental cars come with automatic insurance coverage, especially when using a credit card for payment.
- Myth 8: Insurance Premiums Never Change
- Truth – It’s a misconception that once you have an insurance policy, your premiums will remain the same indefinitely. In reality, insurance rates can fluctuate for various reasons. Factors like:
- accidents
- moving to a new location
- changes in your credit score
- rate increases by the insurer can all impact your premiums
- Regularly reviewing your policy and talking to your insurance agent about how you can improve your rates can help you save money.
- Truth – It’s a misconception that once you have an insurance policy, your premiums will remain the same indefinitely. In reality, insurance rates can fluctuate for various reasons. Factors like:
Auto insurance myths can lead to confusion and financial setbacks. If you understand the truth about these myths, you will be able to make better informed decisions when it comes to your auto insurance coverage. Take the time to evaluate your needs, ask questions, and stay informed to ensure you have the right coverage for your specific situation.
At Whitcomb Insurance we love to sit down with our clients, and we would be happy to sit down with you, answer any questions you might have, whether it’s about disability, auto, homeowners, small business or life insurance. You can count on us to be totally honest and upfront with you!
Along with great insurance options, we also offer Financial Services. You can count on us to be totally honest and upfront with you!
Contact us or give us a call at 425-391-8731.
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