Car insurance is essential for all drivers, but unfortunately, many misconceptions can lead to confusion and frustration, such as commonly believed car insurance myths. Clearing up these misunderstandings is important to ensure you have the right coverage and don’t end up paying more than necessary or, even worse, not having enough coverage when you need it most.
Knowing the facts about car insurance can help save time, money and stress down the road, and Lake Region Insurance Agency has the expertise to help find the right policy for you.
1. Myth: A speeding ticket or accident will automatically trigger a premium increase
Having a speeding ticket or an accident on your record does not necessarily mean that you will see an increase in your insurance premium. While these incidents can affect your rates, the size of any potential rate increase will depend on various factors, including the type and severity of the incident and other aspects such as your age, driving history, and where you live.
Assessing a driver’s risk is a holistic approach encompassing many different factors. A single accident or citation only comprises a small part, and an otherwise safe and responsible driver with only one recent incident may not necessarily see their rates increase.
2. Myth: Newer cars cost more to insure
Contrary to popular belief, newer cars are relatively inexpensive to insure. While a vehicle’s value is a factor in determining an insurance premium, many other factors determine risk, including a vehicle’s safety features and accident record.
While it is true that some cars come with expensive parts and advanced technology that can drive up the cost of a repair bill. Newer modern vehicles are also equipped with safety features meant to reduce the risk of an accident in the first place and may see fewer accidents per mile driven.
Conversely, an older vehicle or less valuable vehicle that is targeted more consistently by thieves may see a higher premium due to the higher risk profile. Due to the numerous factors that go into determining a premium, contacting your insurer for a quote is the best way to determine how much you might be expected to pay.
3. Myth: Not-at-fault accidents don’t contribute to your insurance premiums
Although it is true that isolated, not-at-fault accidents are typically not held against you when determining your premium, there are still ways in which these incidents can affect your insurance rate. Insurance companies view all drivers as a risk profile, and an accident – even if it wasn’t your fault – may indicate to the insurer that you pose a higher risk than someone who has never been in an accident before.
For example, if a particular driver is rear-ended several times more often than average, this will raise concerns about their driving habits (such as potentially brake checking) even though they were never found at fault in any particular collision.
4. Myth: You can get a better car insurance rate by waiting for the right time of the year
It is often thought that car insurance rates are the lowest at a certain time of year, allowing consumers to get the best deal on their policy. However, the period considered when determining a quote for a new customer spans years and is unlikely to be affected by a single seasonal variation.
Having a longer driving history also contributes towards getting lower premiums, so not contributing to that history may actually be counterproductive. In addition, having a lapse in coverage may cause your rates to go up or even be declined as a customer entirely, so if you’re switching carriers, it’s important to get covered sooner rather than later.
5. Myth: Your vehicle is automatically covered for business use
Most personal auto insurance policies do not provide coverage for business use, including ridesharing. This means that if you are using your vehicle to earn an income, you will need to purchase additional commercial insurance to be properly covered.
It’s important to be completely upfront with your insurance provider if you are self-employed in any manner and use your vehicle to further your business. Without specialized coverage and the endorsement of your insurance provider, any losses incurred while operating a vehicle for profit could put the driver at risk of significant out-of-pocket expenses or even legal liability.
6. Myth: All you need is the state-minimum coverage
Although it may be tempting to purchase state-minimum auto insurance coverage to save money, this could expose you to a significant financial risk. The minimum coverage required by law is typically only enough to cover damages you cause to another person’s property or vehicle and may not provide any protection for your own.
State-minimum coverage will also not help you in the case of single-car accidents, such as a deer collision, or if your car is vandalized, broken into, or damaged in adverse weather. Purchasing more comprehensive coverage than the state minimum can help ensure that you are adequately protected in the event of an unexpected accident, especially since many incidents covered under a comprehensive policy may occur when you are not even at the wheel or otherwise have no control over them.
Stay Informed About Car Insurance Myths
Car insurance is a critical aspect of vehicle ownership, and it’s important to understand the facts behind these common misconceptions. Car insurance myths can lead to insufficient coverage, leaving you vulnerable in an accident or other unexpected incident.
Shopping around for different rates and researching your options before committing to any particular policy quote is the best way to ensure you get adequate protection at a reasonable price. It’s important to have an insurance provider you can trust, and Lake Region Insurance Agency is ready to help you navigate any questions or concerns you might have.