In the U.S. 91.3% of households have at least one vehicle, making travel by car one of the top modes of transportation. From going to school and work to running grocery errands, a car is every American’s companion.
With cars such a prevalent part of life, you’d think everyone would be familiar with other things that concern car ownership. But there’s still plenty of misconceptions about it, especially when it comes to auto insurance.
While most of these beliefs are harmless, they can also cost you. Below, we debunk the common myths and misconceptions so you can manage your car insurance policy better.
Red cars have a higher premium
This myth stems from another myth: that red cars are more likely to get pulled over and ticketed. And since certain traffic tickets that signal bad driving behaviors, like speeding and DUI, can increase insurance premiums, many think they’re bound to pay higher premiums for owning a red car.
If you want a flashy red car, though, don’t worry. Insurance companies don’t take car color into account when calculating your monthly premium. Instead, the only factor they consider related to your car is its make, model, and age.
If another person is driving your car in the event of an accident, their policy covers damages
Your insurance policy covering your vehicle is its primary insurance. This means that regardless of who’s driving, your insurance company will cover the damages if your vehicle is involved in an accident.
However, insurance laws vary in different states, so it’s important to familiarize yourself with your state’s rules.
An expensive car means higher premium
This myth may stem from the common belief that it’s more expensive to repair luxury cars. But this isn’t always true, and the cost of the car isn’t taken into consideration when calculating your insurance premiums.
In fact, some mid-priced cars or cheaper older models can have higher premiums than luxury vehicles since they have a higher loss history or are more likely to need repairs because of their older parts.
You can negotiate your insurance rates
Some people think they can negotiate their auto insurance rates, but this isn’t exactly true. This misconception likely stems from the facts that:
- You can lower your insurance rate by asking about specific discounts you qualify fore. accident-free discount and defensive driving discount.
- Insurance companies lower their rates to compete with other providers
These are the extent of lowering auto insurance since the industry is heavily regulated. Beyond that, auto insurance providers compute your premium based on a set algorithm that cannot be negotiated.
Your credit score doesn’t impact your premium
While your actual credit score doesn’t have a direct bearing on your car insurance rate, your credit-based insurance score does. Credit-based insurance score is derived from your actual credit score and is a strong indicator of your likelihood to file a claim.
So, if you have a good credit score and, in turn, a good credit-based insurance score, providers will see you as trustworthy and you may end up paying less for your premiums.
Get Your Car Insured with an Auto Insurance Company in Raleigh
Car insurance can be confusing, which breeds misconception. The solution is to familiarize yourself with your state’s auto insurance laws.
As one of the top auto insurance companies in Raleigh, NC you can also turn to Amistad Insurance Services for help. Whether you need auto insurance or if you have questions about your policy, we can find the answers you need.
Call our 24-hour phone line at 919 926-7166 today.