5 Myths About Car Insurance
Picking out the right type of insurance can be complicated enough, so make sure you’re not believing one of the many car insurance myths when making your final decision. Here are five myths about car insurance, debunked. (See also: 6 Mistakes to Avoid When Shopping for Car Insurance)
1. Expensive Cars Command Higher Insurance Rates
While it’s true that sports cars and luxury vehicles that have a higher risk of being broken into or stolen typically cost more to insure, the fact that these same cars are more expensive really has nothing to do with the insurance rates. Your insurance company will take your vehicle’s loss history, how much it usually costs to repair your vehicle, and several other factors into account when calculating your insurance rate. If you live in a high-crime neighborhood and drive your expensive car long distances on a daily basis, you can expect to pay a higher-than-average insurance rate.
2. Since I’m a Female, My Insurance Rate Will Be Higher
Even though statistics show that female drivers are more likely to get in a car accident than their male counterparts, insurance companies don’t use this as a factor when determining insurance rates. What they do consider is the woman’s driving history, the type of vehicle she’s driving, and how much she drives — just like they do with their male customers. There is no difference in insurance rates based specifically on gender. You just need to make sure you have a clean driving history and are reporting your annual miles accurately to qualify for a better rate.
3. My Insurance Company Will Pay for Property Stolen From My Vehicle
Personal property, including cell phones, handbags, laptops, e-readers, and any other types of electronics are not covered under an auto insurance policy. In some cases, these items will be covered by your homeowners insurance policy, but you will need to file a separate claim. Remember to remove all pricey personal items from your vehicle and always keep them well out of sight of any passersby. These can be a costly loss on your end and in some cases, can also compromise your identity.
4. I Already Paid for Insurance, So I Don’t Need to Buy Another Policy for My New Car
You will always need to get an entirely new policy when you insure a different vehicle. Even if you own an insured vehicle but aren’t planning on driving it, or you just paid for insurance on an old vehicle and decided to buy a different vehicle, your insurance company will need to run the numbers based on your new car’s VIN and issue you a new policy. Your old policy can be canceled until you stop driving the car or authorize no coverage, or you can continue coverage until you sell the vehicle. Make sure you go over these details with your insurance agent and always inform them when you are making a new car purchase.
5. My Red Car Commands Higher-Than-Average Insurance Rates
This myth has been around for decades. Insurance companies don’t take the color of the car into account when determining insurance rates but will take the make and model of the vehicle, how often you drive the car, and your driving history into account. The fact that your vehicle might be a red sports car instead of a red family sedan could have an impact on your insurance rate, because the sports car may be at a higher risk of being vandalized or stolen. So, if you want to get that red car you’ve had your eye on all these years, go ahead and do it without worrying about a drastic increase in insurance. Your final insurance rate will be determined by several other factors.