The average annual car insurance policy in the U.S. is $2,038, says U.S. News & World Report.
Whether you’re a new driver looking for insurance or nearing the end of your policy and looking for other options, you need accurate information. Unfortunately, there’s a lot of misleading information on the topic. Get these 16 car insurance myths out of your head.
Credit Score Won’t Affect Insurance Premiums
In most states, insurance companies can use your credit score to calculate your premiums. A poor credit score may result in a hefty increase in car insurance premiums.
If you’re a resident of Michigan, California, Massachusetts, or Hawaii, insurers either can’t use your credit score or have limits on how much a factor your credit score can have on your premiums.
Red Cars Are More Costly to Insure
While there’s a common belief that red cars cost more to insure, that’s not true. Some believe drivers with red cars take more risks than drivers with cars of other colors. You’ll be glad to know the color of your vehicle plays no role in determining your car insurance premiums.
Minimum Coverage Is All That’s Needed
This may or may not be true. Buying full coverage for an older car might not be worth it. But comprehensive coverage is a good idea if you own a new vehicle. Consider, too, that you may have to get full coverage if you get a car loan to buy a vehicle. You might have no choice.
Speeding Tickets Won’t Increase Premiums
Driving around like a speed demon can have disastrous consequences. Higher auto insurance premiums are a possibility. Remember that insurers look at various things to assess how much risk each policyholder presents. If you get speeding tickets, up goes your rate.
If Someone Lends Their Car and There’s an Accident, the Borrower’s Auto Insurance Will Cover the Damages
Many people believe this, but it’s untrue. If you lend someone your vehicle and they’re involved in a fender-bender, your insurance policy will cover the damage. So, remember that when you lend your car, you lend your insurance. Do you want to take that risk?
Auto Insurance Increases As People Get Older
Insurance premiums are much higher for young drivers, but the rates tend to lower as people age. Motorists in their 50s and 60s will get the best car insurance premiums if they have good driving records. But rates will start to increase again when drivers reach retirement age.
Car Insurance Policy Will Cover Everything
Some people choose minimum coverage and are surprised when they learn after an accident that they won’t get the expected payout. So, it’s a myth to assume that skipping comprehensive coverage in favor of minimum coverage won’t affect coverage amounts.
Armed Forces Members Pay More for Insurance Than Civilians
Armed Forces members do not, as some mistakenly believe, pay more for auto insurance than civilians. Many insurers offer special discounts to honor military members, past and present, so it’s worth calling around to see what’s available.
Four-Door Vehicles Cost More to Insure Than Two-Door Vehicles
Some believe that four-door cars are costlier to insure than two-door vehicles — or vice versa. However, the number of doors doesn’t directly determine whether car insurance rates will be higher or lower than average.
Accidents Always Boost Auto Insurance Rates
Another common myth is that all accidents lead to hikes in car insurance premiums. While it’s possible, it isn’t a given. For instance, if you’re involved in a collision and are not at fault, your premiums should not increase. And, depending on the insurer you’re with, a single at-fault accident won’t necessarily result in a rate increase.
Parking Tickets Can Increase Car Insurance Premiums
While seeing a parking ticket under your windshield wiper might be upsetting, your auto insurance premiums won’t rise. So, if you’re looking for insurance but are worried about the impact one or more parking tickets might have on your rate, forget about it.
Auto Insurance Rates Change Seasonally
It isn’t true that car insurance premiums rise and fall with the seasons. While your rate might fluctuate throughout the year for various reasons, the season won’t have anything to do with it.
Auto Insurance Covers Everything in the Vehicle
If only it were true that auto insurance covers everything in your car. But it isn’t, unfortunately. Your goose is cooked if your vehicle is stolen with your laptop, digital camera, or other things in the trunk. Your car insurance won’t cover those things. It’ll only cover stuff attached to your car.
No-Fault Insurance Means No One’s at Fault After an Accident
Some people believe that no-fault insurance means just that — no one’s at fault after an accident. But that’s not what it means at all. No-fault insurance means that if you’re involved in an accident, you work with your insurer to file a claim no matter who caused the accident. Without no-fault insurance, you would file a claim with the insurer representing the at-fault party.
Car Insurance Rates Won’t Increase Unless Claims Are Filed
Unfortunately, this is untrue. Your auto insurance premiums can increase even if you have a clean record and never file a claim. Sometimes insurers bump up prices. It can happen at any time.
Auto Insurance Covers Using Vehicles for Deliveries or Ridesharing
Your car insurance won’t automatically cover delivery or ridesharing duties. Ask your insurer what extra coverage is needed to use your vehicle for these purposes.
Don’t Believe the Myths! Learn the Truth
These are some of the common car insurance myths you may have heard. You need facts, rather than myths and misconceptions, to make informed decisions.
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