Common Auto Insurance Myths
When it comes to knowing how the insurance premiums are calculated, there are several misunderstandings that might impact most of your decisions when auto-insurance is involved. But it is important to note that most are untrue. Where they originated from or why they are so common is no one's guess.
Below is a list of common auto-insurance myths that will help you make a knowledgeable decision when buying your vehicle insurance.
1. Insurance premium for pink and red cars is very expensive
While there are some rumors that pink and red cars insurance rates are expensive, the color of your car does not affect insurance premiums. Some people believe it is costly to paint a car red or pink. But the truth is that the model or the make will affect the rates, but the color cannot.
2. The more expensive your car is, the more costly it is to insure
The buying price of your car cannot affect the premium rates. In fact, a mid-priced car may cost more to insure than a luxury car. This is because it may have a higher loss history or it is expensive to repair. The most important thing is to consult your insurance agent before purchasing a car.
3. A traffic offense automatically increases your insurance premiums
Even though a traffic offense is not something to be proud of, if the offense is minor, and the overall record is clean, your insurance premiums will not change. However, your insurance rates can be affected by multiple traffic offenses.
4. You only need to observe the state-minimum auto insurance laws
There are state-minimum car insurance laws that every driver has to carry, but the amount might not be enough in case of an accident. Buying only the state-minimum premiums means you will have to pay more from your pocket if you are involved in an accident.
5. Your credit score will not affect the insurance premiums
There are many factors that are used to calculate your auto insurance premiums that include your driving record, age, and gender. However, some states permit insurance companies to consider credit score when determining insurance rates. It is believed that drivers with higher scores have fewer accidents.
6. Comprehensive insurance policy is all-inclusive
Even though comprehensive insurance covers many things, it does not cover everything.
There are many factors that affect the insurance rates but are not common as the six myths mentioned above. They include safety features, and how and where your vehicle is driven. Where your car is parked at night may also affect the insurance rates.
It is possible to change your auto insurance rates with a good driver account, after attaining a certain age, and probably get a discount for taking many policies with the same insurance company.
Bottom-line
The most important thing is to engage your auto-insurance agent when buying the insurance. Also, discuss the discounts you may qualify for, and the things you can change to affect your insurance premium. If you want to pay cheap auto-insurance, start by driving safely and keep an accident-free driving license
Switching Auto Insurance Companies
To car owners, switching insurance policies might be a positive experience. By switching, you can get a better coverage or lower premium fees. However, before you make that move, it is essential to do some research and shop intelligently.
First and foremost, you need to understand the coverage levels and the terms used for various types of insurance before engaging a broker or an agent to pick the best policy. Here are important things to know before switching insurance.
1. Confirm your current auto-insurance rate
Even if you want to review your insurance policy at the end of the year, it is so important to check the rate. You may have qualified for a discount that you were not entitled before. Also, your present policy may not fully cover the changes in your position such as age, new house or marriage.
2. Be a clever consumer
Take some time to learn about insurance companies and their products. Are they able to address your needs? Are they reliable and do they offer excellent customer service? A good insurance company understands that offering remarkable premiums is the only way they can maintain their clients. They are also aware that developing good relationships with their clients is beneficial now and in the future.
3. Confirm the benefits
When switching insurance, it is so important to confirm the benefits. Stop comparing premium to premium only, and start comparing the benefits of each policy. Make a list of all the benefits your present coverage provides, and start comparing with other prospective policies offered by other insurers. Look beyond your auto-premium price. Saving money for an insurance coverage that has no benefits is not a wise decision.
If you have involved an insurance agent, let him/her explain more about the benefits. An experienced agent may raise some issues that you may not have thought about.
4. Always double-check possible extra costs
With proper notice, you can switch your auto-insurance even in the middle of the coverage period. The company reimburses the unused share of the premium. However, some companies do charge a penalty or a fee. Even after making your mind, it is wise to calculate whether the switch makes financial sense or not. Would you wait until the end of the policy before switching or just make a move?
Things to know once you have decided to switch:
- Do not cancel your present auto-insurance policy soon. Before you contact the company to cancel, make sure the new premium is active. It is vital to until you are 100 percent sure.
- The estimate that your agent gave you may increase. The price that your insurance agent estimates is not the final quote.
- Remember to cancel the old policy after receiving documentation for the new policy. Do not only stop paying your premiums. It iscrucial to have a written confirmation.
- Always carry your auto insurance card. In case you are stopped by law enforcers and you cannot show proof of your vehicle insurance, there are penalties.
- If you are switching from one insurance company to another, contact your agent to understand more about the benefits.
Auto Insurance Laws by State
Minimum Sate Auto-Insurance laws
Auto insurance laws differ from one state to another. However, no matter the state you are in, there is minimum auto-insurance coverage needed by each state. Some car owners view the law as extra unnecessary costs.
It is important to note that auto-insurance laws protect you, your loved ones and your car, in case you are involved in an accident or your car is damaged. Hence, even though you may not like the auto insurance laws in your state, they are there to benefit you and save you money.
Below are the minimum auto-insurance laws that are observed in numerous states.
1. Bodily injury liability
This bodily injury law covers injuries caused to another person by the policyholder or by the designated driver. Also, you and the members of your family listed on the policy might be covered while driving another person’s vehicle with their permission.
2. Personal injury protection
Personal injury protection or PIP is also known as medical payments. State auto-insurance laws usually need medical coverage that should pay for injury treatments to the driver and all the travelers of the policy holder’s vehicle. The personal injury protection might cover medical fees, lost salaries and wages, and other costs.
3. Collision coverage
The auto-insurance law protects you and your car. In an even your car is spoiled in a crash, maybe with another vehicle, an object, or the car rolls over, the insurance pays for all the damages. The coverage may also pay for pothole damages.
4. Property damage coverage
The other important law is the one that protects damage to property. This auto-insurance policy pays for the damage your or another person driving your vehicle with your permission might cause to other people’s property. In addition to damages to the car, it may include damages to telephone poles, lamp posts, buildings, fences, or any other structure the vehicle hits.
5. Comprehensive coverageAnother vital auto-insurance law is the comprehensive coverage. The coverage compensates you in case you lose your car through theft, or any other damage such as falling objects, fire, floods, earthquakes, windstorms, vandalism, hails or damaged by an animal.
Even though most states do not require car owners to purchase the comprehensive coverage, if you have a car loan, it might be a requirement.
6. Underinsured and uninsured motorist coverage
Underinsured and uninsured coverage is an essential law that protects you and your family. The coverage is to compensate you, your family members or your designated driver for any damage that occurs when one of you is hit by a hit-n-run vehicle or underinsured or uninsured car.
The coverage takes effect when the fault vehicle does not have insurance to pay for all your loss. The coverage also protects pedestrians.
Bottom-line
To ensure you meet all the state auto-insurance law requirements, get a quote or engage a car-insurance agent to know the minimum requirements for your state. Also, search how you can file a complaint, and what are the penalties for someone driving without the right coverage.
