Insurance myths, if not debunked, can cause the premium of an insurance policy to skyrocket. Knowing that these myths exist is the first step in realizing you might be at risk of paying too much in car insurance premiums. Let’s look at the most common car insurance myths that hike up your monthly bill.

 

Anyone Who Drives My Car is Covered by My Standard Policy

 

The only people covered to drive your car, under a standard policy, are those named on the insurance policy. If you are married, you most likely have already named your spouse as a registered driver of your vehicle. If you have children who are of legal driving age, you probably added them to that policy too.

 

A good rule of thumb is to have collision and OTC (other-than-collision) coverage. This type of coverage could help protect your vehicle and a permitted family member driving it, even if they are not on your policy. It is always smart to review the stipulations in your policy to see how and when this coverage applies, because it can vary from company to company and state to state.

 

My State’s Minimum Is Enough

 

The second myth is that purchasing the minimum (that your state requires) will be enough coverage in the case that you get into an accident. For the most part, minimum requirements are about 25/50/10. This is short for $25,000 bodily injury coverage for one individual, $50,000 bodily injury per accident, and $10,000 for damage caused to someone else’s property.

 

These minimums might seem like plenty, but medical bills and property damage estimates can quickly surpass these limits if the accident is severe enough. If you are involved in a major accident with state minimums only, you will become liable for the remaining balance.

 

I’m Covered if I Use My Car for Work

 

Many people believe that they will be covered by their personal auto insurance policy when using their personal vehicle for business. This is a myth, individual insurance policies will not cover your car when it is used for business. For example, if you use your personal vehicle for a delivery job, if you are in an accident, you will not have coverage. To ensure coverage, ask your employer if their policy covers you and your car while making deliveries.

 

 

My Standard Policy Covers a Break-In

 

Keeping the doors of your car locked helps prevent thieves from accessing your belongings. However, there are times when thieves will shatter windows to access your vehicle. If you do not have OTC (other-than-collision) coverage, you likely won’t be covered for the break-in of your car.

 

OTC (other-than-collision) coverage helps protect vehicles from break-ins, vandalism, and damage from nature. This means you are also covered for hail damage, wind damage, tree damage, flood, and fire.

 

Policy Premiums Increase with a Traffic Ticket

 

One of the most common car insurance myths is that a policy premium will immediately increase with a traffic ticket. In some cases, a car insurance company will not know about your traffic ticket until you decide to reevaluate your policy or purchase different coverage.

 

When researching new coverage, the insurance carrier will look at your driving record for at least the last three years. If you were issued any tickets in this period, they would appear in the search results. The search is conducted when switching policy providers, filing a claim, or updating your coverage. This is when your poor driving habits will affect your premium.

 

My Car’s Age Affects My Rates

 

There are two myths here that go in different directions. The first is that it’s costly to insure an older vehicle because they are more likely to have something fail, which will in turn, cause an accident. The other is that a new car is costly to insure because it has sophisticated parts.

 

There is no set answer as to how age is viewed as each insurance carrier has different criteria for determining the rate of a vehicle. So, it is always beneficial to shop around if you have a concern about your new or older vehicle.

 

Credit History Doesn’t Affect My Rates

 

False! Your credit history can affect your car insurance rates. Most insurance companies believe that strong credit history can predict a lower risk of filing an insurance claim. A credit history review is used by most insurance underwriters to determine the rate for an auto insurance policy.

 

To learn more about car insurance truths and myths, contact our team at www.protectiveagency.com or call (877) 739-9367. Our licensed insurance agents will be happy to answer any questions you have.