Common Misconceptions And Myths About Car Insurance

There are several misconceptions surrounding car insurance. Without educating yourself, you might fall into the trap of thinking you have coverage or that you fully understand the rules and regulations about your policy. We will try to help you comprehend some of the most important aspects about your policy, and discounting common myths. By knowing more about your coverage, you'll pay less, by taking advantage of discounts and not paying for benefits you simply don't need.

Your Valuables- Not Covered

If the valuables inside your car are damaged or destroyed as the result of an accident, your auto policy is unlikely to cover those items. The homeowner's policy you have may cover those items, but not entirely. If you regularly travel with expensive items (like most electronics) insure them separately from your auto policy to provide the protection you need. Specific scheduled riders can be purchased and the cost is very inexpensive. You can add or subtract them with a simple phone call.

These riders may be able available on your homeowner’s coverage for cameras and other items (especially jewelry). It may be a good idea to create an inventory of items that you would want to consider insuring separately. You may be required to furnish appraisals so the carrier knows the current replacement cost and market value.

Also, it's always a good idea to periodically update the appraisals. Jewelry values can change very quickly. There also may be items that you want to delete along with other items that should be added. Cameras, computers and other high-tech items should be removed if you no longer own them or they have substantially depreciated. There also may be additional riders that are now more cost-effective.

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Learn About Your Auto Insurance Policy


One Small Claim Won't Hurt, Right?

A small claim submitted by you can have a dramatic impact on your premium. If you're driving an older car or experienced only minor damage, fully evaluate the dents before you file a claim. Unless the damage is significant enough to warrant that claim, think twice in order to save more money if at all possible. Of course, if the estimate is less than your deductible, paying the bill yourself may be the best option.

But it is important to consider the potential liability issues if you caused damage to another vehicle. In those types of situations, it is usually important to contact your insurer, since failure to report a claim could end up being a huge mistake. Also, if another person drives your car, you are responsible for any damage they may cause. So be very selective if you let others have access to your vehicles. It's a misconception that your company doesn't care who you lend your vehicles to.

My High Risk Car Doesn't Hurt, Does It?

If you drive what's known as a "low risk" or "low profile" vehicle, you could pay smaller premiums. Although there are several guides about which cars will help you earn this discount, investigating online (including our website) can give you some type of idea about how your current or new car might be rated. For instance, investigating crash and repair reports would help. Your own carrier may be able to provide specific data. Upon request, we can also furnish specific statistical data.

Of course, you can expect to pay higher rates for a newer sports car or expensive SUV. Although there are many discounts that newer vehicles qualify for, they still will be much more expensive than older cars or trucks. And if the vehicle is popular for thieves to steal, you'll be charged a higher rate. Regardless, it still makes good financial sense to remove collision coverage from vehicles with more than 120,000 miles.

Your Credit Score Doesn't Affect Your Policy

A good credit score can help you secure lower rates on your car insurance, although many people don't realize it. The reason for this is that research has proven that those persons with lower credit scores are more likely to submit claims, which is why insurance providers can make the argument for higher premiums for these drivers. If your credit is strong, that can only help. You can also improve your credit, which may result in savings.

This is just one of the factors that companies use to determine your "risk score". Obviously, those drivers with a higher risk score will be associated with a higher premium. The fewer accidents, claims, and overall risk factors you have, the better price you will receive. For that reason, it’s important to order your free credit report each year. If you have poor credit, several carriers don't consider your score when underwriting an application. However, future potential discounts could be impacted.

If bad credit persists, we can help place you with a company that doesn't factor it so highly. Conversely, if you have excellent credit, we'll locate the carriers that give you the biggest price break. It's only a myth that good credit doesn't help. Also, if your credit score significantly changes (up or down), changing carriers might result in significant savings, depending on other factors.

Different States Have The Same Rules and Requirements

What Are State Car Minimum Limits?

Each State Has Different Statutes


This is not true. Although some states share characteristics, there are differences and unique situations in every state and particularly if you move (and especially if you move out of state). Keeping that information up to date could prove critical in the event of damage or an accident in addition to providing you with the comfort of knowing you are properly covered.

State minimum liability limits will also be different, depending on that particular state. So if you do move, it is important to be aware of the bodily injury and property damage requirements, so you are meeting (and hopefully exceeding) those limits. Typically, the minimum bodily injury per person requirement is about $12,500-$20,000, depending on the state. Fortunately, many states, such as Ohio, have been recently raising the minimum requirements.

Also, some states will be "fault" states and others will be "no fault." The type of benefits you have will change if you move to a state with different statutes. If you travel across wide areas, you could be subject to more than one type of regulation.

Once I Get My New Policy, I can Forget The Old One?

Assuming that you have received written notification and you have checked the new contract for accuracy, you can safely terminate the older plan. But of course, it’s imperative to avoid any lapse in coverage and double coverage that results in unneeded extra payments being made. Your request should be in writing, so the refund can be backdated, if needed.


Driverless Cars Are Cheap To Insure

Maybe some day they will be, but not right now! And actually, you can not add a driverless vehicle to your policy yet, since much more research needs to be completed before they become available to the public. However, when they are, it is likely that rates will reduce, and perhaps substantially. It's expected that the number of collisions should dramatically reduce. However, hacking issues may have to be addressed. We expect these types of vehicle to become readily available between 2020 and 2025.

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