Drivers might have come across various information about car insurance throughout the years, but often, these details have gone unchecked for accuracy. Some of these pieces of information could be misleading or mere myths. As a result, it becomes crucial to understand the true status of your coverage. Presented here are a compilation of a few interesting and informative facts concerning vehicle insurance, along with some additional information pertaining to the topic.
- Virtually every vehicle owner must at least have the state required minimum auto insurance coverage.
- Usually, state required minimum liability coverage limits may be too low to sufficiently cover injuries and damages caused in many accidents. Motorists are advised to increase liability limits to more comfortable levels to protect their assets.
- Also, liability only car insurance policies don’t cover damages to your own automobile. You need to add Collision and Comprehensive coverage if you want to protect your own automobile.
- About 78% of the US motorists have Collision and Comprehensive coverage as well as Liability.
- Typically, auto insurance doesn’t automatically offer a courtesy car if you lose the use of your automobile due to a covered incident. You need to add Rental Car Reimbursement coverage if you are highly dependent on your automobile and need to hire a replacement when it is being repaired by insurance.
- Rental Car Reimbursement coverage doesn’t pay for hired vehicles when your vehicle is in the garage for mechanical issues. It must be related to an insured loss.
- Your auto insurance may extend the same coverage you have to rental cars. You should check your policy coverage before paying for insurance at the rental counter.
- Vehicle insurance doesn’t cover mechanical issues like engine blowout because they are considered part of wear and tear and maintenance.
- Typically, most insurers want to know who else at driving age living with you so that they can rate them because people who are living with you are considered having access to the vehicle.
- Policyholders may have the option of excluding some drivers in their household from their policy to prevent them influencing their premium. In such cases, excluded drivers should never use the vehicle.
- If you lend your car to someone else and they crash it, your insurance may have to pay for damages and injuries up to your policy limits and the claim goes on your record, increasing your premiums.
- You probably know that young drivers are high-risk and therefore they are charged as much as three times more for auto insurance but did you know that after the age of 70 your rates may start going up again.
- You can add or remove coverage or drivers in the middle of your policy and your premium is adjusted accordingly. You don’t have to wait until the renewal.
- Paying your premium monthly may appear to be very convenient but you may save significantly if you can pay your premium in full.
- If you cannot maintain a good credit score because you are poor and living paycheck to paycheck and sometimes missing payments you may have to pay more for vehicle insurance.
- Living in a high-risk area of your town may affect your auto insurance premium as crime, auto-theft, vandalism and claims in your zip code are taken into account when premiums are calculated.
- Homeowners usually get lower rates on car insurance as they are considered more responsible.
- Married motorists get discounts too because insurance companies consider them more reliable drivers.
- Many auto insurance companies offer accident forgiveness programs to motorists who have been accident and ticket free for a while (usually five years). It means your rates won’t automatically increase after your first at-fault accident.
- Higher deductibles usually lead to lower premiums, but it also means you’ll pay more out of pocket if you have to make a claim.
- Young male drivers usually pay higher rates than young female drivers but the premium gap may narrow or disappear as the drivers get older.
- Where you live affects vehicle insurance rates. Urban areas tend to have higher rates due to increased traffic and potential for accidents, auto-theft and vandalism while rural areas have lower rates.
- You may be able to save on auto insurance if you have Costco, AARP, AAA memberships.
- Allowing your vehicle insurance to lapse, even for a short period, can lead to higher premiums when you reinstate coverage. Continuous coverage shows responsibility.
- 12.6% motorists in the US are uninsured and you can protect yourself against an accident caused by an uninsured driver by adding Uninsured Motorist Coverage to your policy.
- Make, model, value, engine size and type of your automobile affects your insurance premium. Usually, sports and luxury cars are more expensive to insure because they tend to be expensive and high-performance.
- Two door automobiles may cost you more to insure as well since they generally have high collision claims.
- Also, replacing your automobile with a new one may increase premiums too, in most cases due to increased valuations.
- Hail storms may be rare in most parts of the country but they cause substantial damages every year in Colorado, Nebraska, Wyoming and Texas. You need Comprehensive coverage to be protected against hail damage. Comprehensive coverage may provide protection against tornadoes and hurricanes too.
- Gilbert J. Loomis was the first person to buy a liability automobile insurance policy in 1897, according to the Ohio Historical Society. The policy protected Loomis if his car damaged property or injured or killed an individual. It was issued in Dayton, Ohio.
- If you have an auto loan and your vehicle is totaled, you may not get enough from insurance to pay off your loan unless you have Gap insurance.
- If your vehicle is broken into and your personal items are stolen, your auto insurance may not pay for them, even if you have Comprehensive coverage.
- Stopping payments is not a good way of cancelling auto insurance because your policy may carry on a bit longer than the date you want to cancel due to grace and cancellation periods. That is why it is always better to cancel your policy by letting your insurer know.
- Having more than one active insurance policy covering your vehicle may actually create problems when you have a claim because companies may have a disagreement as to the amount of compensation and who is going to pay that can delay your claim settlement.
- Double-dipping or attempting to receive compensation from more than one insurance company for the same loss or damages is considered insurance fraud, which is illegal and can result in criminal charges, penalties, and even imprisonment, depending on the severity of the offense and the state.
- The internet is the main source of auto insurance quotes since 2020.
- You can buy your vehicle insurance policy today but set a date in the future.
- Most car insurers don’t charge cancellation fees or charge a negligible fee when a policyholder cancels their policy mid-term.
- Color of your automobile has no effect on your premium as it isn’t a factor considered by insurers.
- Surprisingly, having a garage to park your vehicle may not affect your auto insurance as much as you may think. Many insurers in the US may not offer any discount for having a private garage and some of them may only offer a slight discount. This is mainly due to difficulty in verifying if people really use their garage for parking cars as many people may be using them for other things.
While providing a few facts above, we ended up providing answers to a few frequently asked auto insurance questions and demystified several myths as well. Thanks to the internet, it is easier to fact check what you know and believe about your vehicle insurance coverage. But often the best solution when you want to clarify a point is to contact your insurer or agent since policy coverage can change depending on the insurer and state.