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5 Common Misconceptions about Auto Insurance

There is a lot of misinformation out there about auto insurance, and it leads to some people just not knowing what is truth and what is myth. Let us help you know what is right, and what is wrong with many of these myths.

Myth #1: The color of the car will affect the insurance rate.

This is an older myth that was created based on the assumption that you will get pulled over more if you drive a specific color vehicle. While that part may be true, there is absolutely no truth to your car color being able to effect your insurance price. The insurance rate is determined by other factors like the make and model of the car, its age, and its safety features. If you are looking at getting a car, don't let anyone tell you to avoid a certain color because "your rates will skyrocket with that color vehicle", because that just is not true in any way.

Myth #2: Full coverage means everything is covered.

Full coverage is just simply a buzz word in the insurance industry. In our agency specifically we will work with potential customers who will say they have full coverage. We will start working on their policy for them and get everything matched up to find that they they don't have everything covered. Full coverage just means that you are simply covered with comprehensive and collision coverage. Many of the other coverages that people think about such as rental coverage, towing coverage, etc., are not considered full coverage, they are extra coverages.

Myth #3: My insurance will buy me a brand new car if mine is totaled.

If you are in an accident, and your car is going to be totaled, you'll obviously be looking to get some kind of payment so that you won't be without a car. Yes, you'll get your car replaced, but you won't necessarily be getting a brand new car. If a car is totaled in an accident, the insurance company will typically pay the actual cash value of the car, which is the car's market value minus depreciation. This may not be enough to purchase a new car, especially if the car is older.

Myth #4: Personal belonging in my car are covered by auto insurance.

Raise your hand if you've ever left something in your vehicle that you shouldn't have left? Okay. I get it, because I've done this before too, especially in college leaving my laptop and charger in my car so I'd never forget it when going to class. Did you know that if you were to get in a wreck, or someone was to break into your car and those items became lost, you wouldn't have coverage with your auto insurance? Typically, your auto insurance does not cover personal belongings inside the car, such as laptops or cellphones. These items may be covered by a homeowner's or renter's insurance policy.

Myth #5: Your insurance rate is solely based on your driving record.

Your driving record is most definitely important. With a bad driving record you'll see higher prices than others, but it isn't the only thing that you're rated on. In fact, there are a handful of other factors including:

  1. Age: Younger drivers (anyone 25 or younger) generally have higher insurance rates because they are considered to be riskier drivers.

  2. Gender: Males typically have higher insurance rates than females due to statistical evidence of males being involved in more accidents.

  3. Type of vehicle: The make and model of the car can impact the insurance rate. Generally, luxury cars or sports cars have higher insurance rates than family cars.

  4. Location: The insurance rate can vary depending on where the driver lives. For example, living in a densely populated urban area with higher traffic and more accidents can lead to higher insurance rates.

  5. Credit score: In some states, insurance companies can use a driver's credit score as a factor in determining the insurance rate.

  6. Deductible: The insurance rate can be adjusted by choosing a higher or lower deductible, which is the amount the driver pays out of pocket before the insurance coverage kicks in.

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