Auto insurance coverage isn’t always the easiest to decipher and that unfortunately often leads to misinformation. Here are a number of auto insurance myths that you should be aware of.
Myth #1 Red Cars Cost More to Insure
Nope – sorry this isn’t true. If you think about this logically, a red car would probably cost less to insure as it is easy to spot on the road and probably less prone to collisions.
Fortunately, the color of your vehicle does not affect your premiums. However, make and model are important for insurers as they help them determine the safety record of the vehicle and the cost of claims.
Myth #2 Expensive Cars Cost More to Insure
Not really – we’ll say that this one is partially untrue. Your liability insurance premiums are not usually affected by the cost of your car because the likelihood of you getting into an accident and injuring someone or damaging something doesn’t increase with the value of your vehicle.
However, you will pay a higher premium for your comprehensive and collision coverage if your vehicle costs more to repair or it has a history of more losses. Usually higher valued luxury vehicles are more costly to repair so that makes this myth partially true.
Myth #3 Traffic Tickets Always Lead to Higher Premiums
This one isn’t true either. While traffic tickets are never a good thing, a single infraction may have little or no impact on your premiums if you maintain an otherwise clean driving record or it’s a minor ticket. Also in Rhode Island, you can have a minor violation waived if you have a clean driving record for 3 years and pay the court fee to request the violation be waived.
In Rhode Island, you can also attend traffic school to reduce the number of points on your license. However, multiple tickets or serious violations will almost certainly lead to higher premiums.
Myth #4 State Minimum Liability Coverage is Sufficient
Absolutely not! Rhode Island’s minimum liability coverages do not protect you well.
If you are in an accident that leads to injury, damage, or death you’ll be liable for all amounts over the policy limits. Considering the minimums are only $25,000 per person for bodily injury ($50,000 per incident) and $25,000 for damage to another person’s property you risk your finances and future when you rely on these low state minimums.
Myth #5 Credit Doesn’t Affect Premiums
Rhode Island insurers can legally access your credit when they decide how much you’ll pay. They consider credit a good yardstick for measuring your reliability as those with higher credit scores typically file fewer claims.
Myth #6 Everything’s Covered Under Comprehensive
While It is designed to cover many risks, no insurance policy covers everything. It only covers damage caused by events other than a collision. You’ll need additional coverages for collisions or uninsured motorists.
You need auto insurance, but it doesn’t make sense to just buy a policy without understanding what you’re getting.
Rely on the expertise of a good insurance agent to guide you through the process. Give us a call today – you may be missing out on potential discounts, policy bundling opportunities, or you may pay for coverages you don’t really need when your money would be better spent in other ways.
Don’t believe the myths – get the facts from a reliable insurance expert with access to the right products.