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Car Insurance 102: Car Insurance Myths

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Red car
August 27, 2021

Whether you’re shopping for car insurance, a new tv, or a new pair of sneakers, it’s best to know the facts about what you’re buying. We’ve all heard the line that red cars are more expensive to insure, but is that really true? SafeAuto is here to break down some common misconceptions about car insurance. 

Myth #1: Men pay more than women for car insurance. 
Typically, young men pay more for car insurance than young women because insurance companies see them as riskier drivers. Additionally, according to the Insurance Information Institute, women tend to get into fewer accidents, and have fewer DUIs and serious accidents than men. However, research from The Zebra has shown that on average, women pay 0.4% more than men. Their investigation also found that women “can pay up to 7.6% more than men, depending on their age and location”. This is especially true for middle-aged women, even though they are less dangerous behind the wheel than their middle-aged counterparts. This brings up the question: Does gender matter? Currently 7 states – California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania – seem to think not because they have banned gender as a rating factor. Are you worried you might be paying more than necessary because of your gender? Make sure you know what ratings your insurance company uses when calculating premiums. Looking to switch from a company that uses gender? Try checking out a usage-based insurance. And if you have a driving-age teenager, make sure you take advantage of every possible discount. Some companies offer good student, claim-free or defensive driver discounts. 

Myth #2: Red cars are more expensive to insure. 
This myth could not be more untrue. The color of your vehicle does not have any effect on your insurance premium. Some insurance companies don’t even ask the color of your vehicle. When it comes to vehicle information insurance companies are only concerned with the type of car you drive, not what color it is. 

Myth #3: Car insurance is tied to a person, not a vehicle. 
As a general rule this is false. Car insurance typically is tied to a vehicle, not a person. If someone else drives your car and is involved in an accident your insurance company could be liable for damage costs. If there is someone other than you who will be driving your vehicle you should list them as an included driver on your policy; this will ensure they are covered by your policy. However, there are always exceptions to the rule and these things can differ by state. If you are curious about your coverages and who would or would not be covered as a driver of your vehicle, contact your insurance company for clarification. 

Myth #4: A personal auto insurance policy will cover a car for business usage. 
Insurance companies usually view business drivers as greater risks than personal drivers because they are driving more frequently. Some personal insurance policies may provide enough coverage for business usage. Verify with your insurance company if business usage is covered under your personal auto insurance policy or if you need an additional business or commercial policy. These policies provide different coverages that could be more well-suited to your needs. Additionally, the business for which you are driving your vehicle may provide its own form of coverage. All of this is worth looking into to make sure you’re fully covered when you need it. 

Myth #5: Once you turn 25 your premium automatically goes down. 
It is true that age affects your insurance premium. And sure, you may see a decrease in your premium when you turn 25, but it isn’t a guarantee. Aside from age, there are many other factors that are considered by insurance companies when calculating premium, including driving record and years of driving experience. If you have been in multiple accidents or have numerous violations, the fact that you are now 25 may not have the effect on your premium that you had hoped. Additionally, if you didn’t begin driving until you were 23, you may pay higher premiums than someone who has been driving since they were 16.  

Myth #6: If you have “full coverage” you are completely covered for everything that could go wrong. 
First of all, there is no such thing as “full coverage”. The term “full coverage” usually refers to the combination of comprehensive and collision coverages. (To learn more about comprehensive and collision coverage, visit our “Car Insurance Terms You ‘Auto-Know’” blog.) While these coverages do cover a lot of situations, they do not cover everything. For example, in the case of SafeAuto, if you are involved in an accident where you are at fault, comprehensive and collision coverage does not cover the cost of renting a car if your car is not drivable. Additionally, if you should need to have your vehicle towed or other roadside assistance, these things are not covered under comprehensive and collision coverage and would require the appropriate coverages be added to your policy. And remember, in certain states these additional coverages may need to be on your policy for a minimum amount of time before they can be used. 

It can be hard to tell insurance fact from fiction but don’t get discouraged – SafeAuto is here to help! If you have questions about what factors make up your insurance premium, what coverages you might need for certain situations, or just want to get a quote, visit the SafeAuto website today or speak to one of our licensed agents 24/7 by calling 1-800-SAFEAUTO (1-800-723-3288). 

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