Most people out there do not know much about their car insurance and the different factors that influence it. In reality, there are countless things that can have an impact on how much you can pay. At the same time, different misconceptions appeared in regards to car insurance. The really common misconceptions are presented below based on research done by auto repair Lakewood Colorado.
Red Cars Are More Expensive To Insure
This is a rumor that has been floating around for way too long but it is a completely false one. Car color is never seen as a factor that dictates insurance rates. What has an influence on the insurance rate is the car model and make. If you want to buy a red car, feel free to do so.
An Expensive Car Costs More To Insure
Contrary to popular belief, the purchase price does not affect premium costs as much as repair costs. There are mid-priced cars that will cost a lot more than luxury cars when you want to insure them because loss history is higher or repair costs are higher. Make sure that you talk with the insurance agent before the car is bought in order to avoid new premium surprises.
Traffic Tickets Automatically Increase Premiums
It is never great to get a traffic ticket but in the event that you have an overall clean record and the violation you did get is minor, insurance rates do not automatically go up. Most U.S. states allow you to go to traffic school and upon completion of a licensed course your insurance company should remove the charge. However, rates are going to be affected when there are many traffic tickets on your record so check with your Department of Motor Vehicles to see if you qualify first.
State-Minimum Insurance Is Enough
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In most states you need to carry a specific liability insurance amount but this is not actually enough in the event that you are involved in an accident. If you buy just the minimum, you end up paying more when an accident happens. Make sure that you discuss things with the agent so as to determine an appropriate amount based on your financial situation and driving habits.
Credit Does Not Affect Insurance Rates
Numerous factors are considered when calculating insurance rates. This includes driving record, claims and age. In some cases, credit history is also considered since this shows if you can pay off the loan fast or not.
A lot of states will allow using credit scores in order to set rates. This information is calculated by insurers to forecast the likelihood of claims. There are only a few U.S. states that have banned this practice – California, Hawaii and Massachusetts.
Comprehensive Car Insurance Will Cover Everything
Last but not least, comprehensive car insurance will cover a lot. However, it is mainly aimed to cover some things that other coverage’s do not, like uninsured motorists or collision. Comprehensive coverage is mainly known for theft/vandalism but it’s also there for weather events, fire or even animal collision. Basically, this covers car damage that happens in other cases sometimes referred to as “Acts of God” that do not include collisions.