The prevalence of auto insurance means that some strange ideas have cropped up. You may have run into a few of these around the water cooler. If you aren’t an auto insurance expert, check out a few of the most prevalent myths and the correct answers.
Myth: “I have no fault insurance. That means any accidents are not my fault!”
Not a chance. All “no fault” means is that the insurance carrier will pay for your damage no matter who is at fault. They’ll be glad to go after whoever is actually at fault, but they’ll pay none the less. The kind of insurance you have means nothing to the officer who’s writing the ticket.
Myth: “Insurers charge higher rates for red cars, because people who drive red cars get more tickets.”
Sorry, but the color of your car is meaningless when it comes to your insurance rate. Factors like the year, make, model, body type and engine size will come into play, along with other personal factors including your age, credit history and your driving record. In general, if you’ve gotten a lot of tickets, you’ll be stuck with a higher rate.
Myth: “If I lend my car to someone and they’re in an accident, their insurance company will pay.”
Again, no. If it’s your car, it’s your responsibility! There is, however, a chance your friend’s insurance will chip in if the damages exceed the limits of your policy. And a bit of bad news – this will go on your insurance record, whether you were there or not. Your insurance premium will probably go up.
Myth: “The government tells insurance companies what rates they can charge.”
The government doesn’t set car insurance rates. The state’s insurance department regulates the rates, but each rate is dependent on you, the driver. The major factors include where you live, what your credit score is, your marital status and your driving record, along with other factors relating to the vehicle being insured.
Myth: “I just bought a new car. It’s automatically covered under my existing policy.”
That depends. In most cases, you’re required to notify your insurer within a specific number of days after the purchase of a new vehicle for coverage to take effect. It’s always best to call your insurer instead of assuming you’ll be covered.
Myth: “Men under 25 pay more for auto insurance.”
True and false. Men under 25 do usually pay more than female drivers of the same age. But across the board, teenagers pay more for auto insurance. Parenthetically, seniors will pay more too. This is, in large part, because these age groups are involved in a statistically higher number of accidents.
Myth: “My credit score doesn’t affect my insurance rate.”
Unfortunately, your credit score does matter. There are many insurance companies that take your credit score into consideration if you change or renew your coverage.
