Of all the information circulating about auto insurance, what is rumor and what is real? Are you basing your choices on fact? To cut through the fiction, keep the following myths in mind.
1. My car color affects my premium.
If you prefer hotshot red, go ahead and get it. You don’t have to worry about higher premiums because of the car’s color. Your insurance cost is based on several factors, but this isn’t one of them.
The car’s make, body type, model, age, and engine size affect the premium. The vehicle’s safety record, price, and the cost to repair it also come into play. If you want a lower premium, consider these factors rather than the paint job.
2. As my age increases, so will my premium.
Typically, the opposite is true. Those over 55 years of age may be eligible for discounts. These include reduced driving discounts and programs available through AARP. Discounts vary by region, so check with your insurance provider about your options and eligibility.
3. Bare-minimum coverage is sufficient.
Most states require drivers to carry a minimum amount of liability insurance. However, it is generally recommended to obtain coverage that goes beyond this bare minimum.
A serious accident can quickly generate expenses far exceeding the minimum coverage. A good rule of thumb is to have $100K in bodily injury per person and $300K per accident.
4. When I give my keys to a friend, my friend’s insurance takes over.
In many cases, the policy that covers the vehicle is considered primary. If an accident occurs while your friend is driving your car, it’s likely that your insurance will be responsible for coverage, not theirs.
5. My car is fully protected from all types of damage.
This could be true, but it depends on your policy type. A standard policy may not include theft, vandalism, or natural disasters. For full protection, choose collision and comprehensive insurance.