The Most Common Misconceptions About Car Insurance

By Aahil Hussain

There are many misleading pieces of information on the internet regarding car insurance. Not only do these spread online, but also through word of mouth. Oftentimes these pieces of advice are misconstrued and twisted to the point that it sounds ridiculous, yet people still believe it. Within this article, we’ll discuss the most common myths about car insurance and debunk them. It’s important to know what factors affect your rates and policies. 

The first “common wisdom” myth that seems quite absurd is that your vehicle color affects your car insurance rate. Many individuals think that having a brighter color could raise the insurance price yet, insurance companies primarily look at a vehicle's make, model, year, safety report, and many others factors that don’t include color. Another perspective to help you understand better is that you can always change the color of your vehicle without having to inform your insurance company. Therefore, when purchasing your auto insurance, the color does not affect your rate overall. 

Secondly, many people assume that your credit does not affect your insurance policy. This is completely false. Your credit score has a tremendous impact on your insurance policy. Insurance companies look at your payment history, whether you want to renew, change, or purchase a new plan. They also use data analytics to see how likely you are to file for an insurance claim based on your financial management. Before you purchase auto insurance, look at your credit score and finances to gauge what type of policy and rate you may receive. This will help manage your expectations when you look online or go in-store. Even if your credit score isn't great, A-MAX works with insurance carriers that specifically try to find rates to match your credit history.

People sometimes opt for the cheapest and bare minimum auto insurance policy and believe they will be better off. On the contrary, you are more likely to pay high out-of-pocket costs than if you had a more comprehensive policy. The general standard is to purchase a $100,000 bodily injury protection and $300,000 per accident. Although most states only require the minimum insurance, it’s best to get a plan that covers you and your vehicle adequately. 

One big misconception that should be more well-known is what happens if your friend drives your car and gets into an accident. Most people have long assumed that the individual who got into the accident, regardless of the vehicle owner, will pay the driver’s insurance. However, that’s not the case. The owner of the vehicle’s insurance company will pay the premium and cover the costs, which in turn raises your rates in the future even though you weren’t the one in the collision. For this reason, always be cautious who you let drive your car. Trusting someone could end up costing you thousands of dollars, especially if you don’t have comprehensive coverage. 

A simple misconception that folks have is that veterans and older people pay more for insurance. The truth is they often receive discounts on their rates. Ask your insurance company if you qualify for these special discounts as they could save you hundreds of dollars a year. 

Many people believe that a small white lie on your insurance policy won’t hurt you, yet it can cost you a lot. People will occasionally omit small details about their insurance history. Suppose an insurance company catches this discrepancy in the future, your policy can be invalidated and your insurance company can require a lump sum payment immediately. 

When looking for auto insurance policies, don’t be afraid of these common misconceptions. Ask the company what they factor into the insurance rate, about any special discounts, and what coverage is best for you. Hopefully, this article will ease your mind on some of the widespread misinformation out there and get you closer to being covered.

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