Auto insurance policies can be confusing in and of themselves, but add in conjecture and auto insurance myths, picking a policy can get downright complicated. Read on to separate fact from fiction. We set the record straight on some of the most persistent insurance fabrications.
If you’re the parent of a teen driver, you may be wondering what you can do to help ensure his or her safety. Aside from knowing and honoring the rules of the road, safe teen driving involves operating the appropriate type of vehicle. In addition to researching auto insurance for teens, there are five tips to consider when choosing your teen’s first car. Designed to help protect young drivers, these suggestions focus on safety, which also helps to lower the cost of car insurance for teenagers.
Myth: Smokers pay more.
Answer: False. Auto insurance companies don’t even ask whether you smoke or not when putting together a quote.
Myth: One speeding ticket will make my rates skyrocket.
Answer: Also false. Generally, you have to get two tickets to see a bump in your premiums. However, your driving history and the circumstances of the citation may have an impact on your rate. If this is your second or third ticket or you were caught going 20 or more miles per hour over the speed limit, you may be labeled as “high risk.”
Myth: My insurance rates will be similar to my neighbors.
Answer: False. Every insurance policy is individually determined. Factors such as years of driving experience, driving record, vehicle type and marital status are considered. Every person, every situation is unique and rates vary because of this.
Myth: Once you turn 25, your rates drop dramatically.
Answer: It depends. Prop. 103 mandated that years of driving experience be used to determine insurance premiums, not age. That being said, driving experience is just one of many factors insurance companies use to determine a quote. They’ll look at vehicle information, driving record, annual mileage, claims history and the statistics of other customers just like you.
Myth: Car color impacts policy pricing.
Answer: False. If you are worried about picking red or white—don’t be. Insurance companies aren’t likely to ask you the color of your car when they are compiling a quote. They care about the make, model, year and age of your car.
Myth: Crooks like to steal new cars.
Myth: If my car is stolen, my insurance will cover it.
Answer: It depends. If you don’t have comprehensive coverage, you are not covered. Comprehensive coverage pays for damage to your car that is not the result of an accident, such as; theft, vandalism, fire, weather and if you hit an animal.
Myth: My friend was driving; his insurance will cover the damages.
Answer: Nope. You’re on the hook. It’s your car and it’s your responsibility. Insurance follows the the car, not the driver. If your coverage is not enough, then, your friends insurance will cover the rest.
Myth: My personal policy will cover all uses of my vehicle.
Answer: False again. A personal auto policy will cover your personal driving needs, but nothing related to work. If you’re a realtor or you deliver pizzas, you will need to purchase a commercial policy.
Myth: My rates won’t go up if I don’t report the accident to my insurance company.
Answer: Maybe. Although you may have not reported the accident to your carrier, the other person involved may have reported it to theirs. As a result their company may inform yours about the accident, leading to an increase in premium. Additionally, the accident may appear on your motor vehicle record and follow you for at least three years. You are required by the terms of your policy to report all accidents to your insurance carrier, and all accidents with damages totaling $750 or greater and all injury accidents to the Department of Motor Vehicles.
Myth: The police said it wasn’t my fault. So, I am safe.
Answer: Nope. Just because the police said you were not at fault, doesn’t mean the insurance companies will agree, at least in whole. Insurance companies use comparative negligence to assign partial risk to both drivers in an accident where they believe no one is solely at fault.
Myth: I just got my first speeding ticket and now my rates are going to skyrocket.
Answer: Not necessarily. Many auto insurance companies will not raise your rates from your first speeding ticket. However, if you rack up 2 or 3, you can bet you’ll see an increase.
Myth: Parking tickets will affect my rates
Answer: No. Parking tickets do not count against your driving record; but unpaid parking tickets can affect your ability to renew your driver’s license.
Myth: I recently paid my insurance premium and purchased a new car. This means that I am covered.
Answer: This is true up until a certain point. You typically have a certain amount of time under the terms of your policy to notify your carrier of a new or replacement vehicle. If you have purchased a car that is very different from your current model, your premiums could be significantly different. It is always a good idea to contact your agent or carrier immediately to advise them of your new vehicle.
Myth: I’ve never been in an auto accident so I don’t need insurance.
Answer: Nope. While most are lucky enough to not have been in an auto accident, it is still imperative that you protect yourself, people in your vehicle and others sharing the road. It is also illegal in all states to drive without auto insurance.
At All Solutions Insurance, we believe education is the key to getting the right insurance for your needs. Questions? Concerns? Comments? Contact our auto-insurance experts today for great rates for all your insurance needs.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverage’s in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.
For more general information regarding insurance, call:
Moreno Valley Office at (951) 247-2003 or San Jose Office at (408) 225-4300
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