When purchasing an auto insurance policy, it’s important to fully understand the different terminologies and factors included in the contract. It helps to prevent long-term costs and avoid common auto insurance myths that have become popular over time.
Unfortunately, many policy owners fall prey to these myths and only realize their mistake after getting involved in some sort of accident.
In this blog, we’ll dispel 5 myths regarding auto insurance.
Myth: The Color of the Car Affects the Insurance Rate
This one definitely ranks as one of the more bizarre myths floating around. Apparently, there’s a belief that red cars have higher insurance rates because the color is linked to reckless speeding and driving. In reality, your car could be black, red, or rainbow colored and it wouldn’t affect the premium cost.
Factors that do affect the insurance rates include engine size, model, make, year, and body type. The likelihood of your car getting stolen, its safety features, and the repair costs are also factored in.
Myth: Expensive Cars Have Higher Insurance Rates
Insurance providers look at the history of claims made on your car and not its sale price. This is done keeping in mind the cost of repair and replacement which is then used to determine the cost of your policy. In certain cases, a mid-ranged car may cost significantly higher to insure than an expensive one if it has a high number of claims.
Myth: A Friend Crashed the Car so They Have To Pay For It
The idea may sound fair, but that’s not how it works. If you let your friend borrow your car and they crash it, the costs to cover the damages will be deducted from your policy. Insurance providers look at the vehicle and not the driver.
The only scenario where your friend’s insurance policy might come into play is when the damages exceed the policy limit. In cases such as this, umbrella insurance can save you from getting into a financial mess.
Myth: Speeding Tickets Will Definitely Increase the Insurance Rates
Tickets don’t always lead to spikes in your policy rates. If you have a clean record and the ticket was minor, you’ll manage to get off the hook pretty easily. Some auto insurance policies even come with an accident forgiveness feature that prevents increased rates even if you were the one at fault.
Myth: Your Credit Score Doesn’t Impact the Insurance Rate
Your credit score (based on your credit history) may have an effect on your insurance policy. It’s a reliable indicator of how well you handle your finances and is taken into account whenever you decide to purchase or renew your auto insurance policy. A low score may be the reason behind higher premium rates.
Being well-informed allows you to purchase the policy best-suited for your needs. B&M Business Insurance Agency provides affordable auto insurance policies in Roseville, California. Contact them today for more information.