Auto insurance is an absolute must for drivers. But how much do you actually know about this critical safeguard? You might have some ideas about auto insurance that you’ve heard from friends or just seem to be common knowledge. Chances are, not everything you might’ve heard is true. Some common misconceptions about auto insurance persist and they could be keeping you from getting the coverage you need at the best rate possible.
1. Red cars cost more to insure
Many associate a red vehicle with a fast and flashy sports car. You may have heard a red car is costlier to insure, but that’s not the case. Black, gray, yellow, white, blue — it’s all the same as far as your insurer is concerned. If you have your heart set on a bright red car, go for it. The power hue will not have an effect on your auto insurance premium.
2. You should only get the minimum insurance coverage
Most states require a minimum amount of auto insurance, but is that enough? While you may be tempted to only purchase the policy size required by law, going bare bones could end up costing you. Most states require a minimum of $50,000 of bodily injury auto insurance coverage as well as $25,000 in property damage liability. But consider that, without additional coverage, if you got into an accident with an uninsured or underinsured driver, you could end up paying out of pocket. Inadequate insurance could result in a large expense you may not be financially prepared to handle.
3. Men pay more for auto insurance than women
Is there a gender gap when it comes to auto insurance? You may have heard men pay more for coverage than women, but that’s not quite the whole story. Several factors could affect your rate, including where you live, your age, your driving record, your credit score, car type and yes, your gender. Insurance companies charge men more than women because statistics show that men have a higher risk of accidents and speeding. Women from age 16 to 24 pay around $500 less a year for car insurance than men. Though, this gap shrinks as drivers get older.
4. If someone else drives your car, their auto insurance policy covers any damages
If you allow someone to drive your car and they get into an accident, will their auto insurance cover damage to your car? Think again. You may want to be cautious of who you let drive your vehicle, because auto insurance is usually tied to the car — not the driver. You will likely be responsible for the deductible on damages as if you were the driver. However, if there are bodily injury claims beyond your policy’s coverage, your friend’s coverage may come into play.
5. Your insurance provider may cancel your policy after an accident
If you get into a car accident, you may worry you’ll be left without coverage. Technically, your insurer may cancel your policy at any time. However, an accident is not likely to be a reason for cancellation. Your insurance company is more likely to cancel your policy due to nonpayment, lying on your application or in a claim, a suspended or revoked license or a new medical condition that affects your ability to drive. An accident may affect your premium, but your rates usually won’t increase until your premium renewal time. Also, some companies offer accident forgiveness.
Use the right information to find the best auto insurance policy for your needs
Now that we’ve busted these auto insurance myths, get some facts from our Auto Insurance 101 article to learn everything you need to know about this important topic.
Ally and Marsh have collaborated to help take the guesswork out of auto insurance. We’ve teamed up with Marsh so they can provide you with insurance answers, competitive rates and high-quality coverage personalized for your needs.
Drive into your future with confidence.