Common Auto Insurance Myths

Auto insurance is an essential part of owning a car. However, it can be confusing to understand all of the different policies and coverage options. Here is a more detailed look at some of the most common auto insurance myths. 

New Cars Are More Expensive to Insure

It is true that new cars are more expensive to replace than older cars. However, insurance companies also take into account the safety features of new cars when setting rates. In fact, many new cars have advanced safety features that can actually make them cheaper to insure than older cars.

For example, a new car with automatic emergency braking and lane departure warning systems may be cheaper to insure than an older car without these features. This is because insurance companies know that these features can help to prevent accidents.

Your Quote Is What You Will Pay

Your auto insurance quote is just an estimate. Your actual rate may be higher or lower depending on a number of factors, such as your driving record, credit history, and location.

For instance, if you have a good driving record and credit score, you are likely to get a lower rate than someone with a poor driving record and bad credit. Additionally, rates can vary depending on where you live. Insurance companies typically charge higher rates in areas with higher crime rates and traffic congestion.

If you are unsure about what your actual rate will be, you can ask your insurance agent for an estimate.

Red Cars Cost More to Insure

This myth is likely due to the stereotype that red cars are more likely to be driven by reckless drivers. However, there is no evidence to support this claim. Insurance companies do not set rates based on car color.

Car Insurance Rates Will Stay the Same If You Move

Your car insurance rates can vary depending on where you live. Insurance companies take into account a number of factors when setting rates, such as crime rates and traffic congestion. If you move to a new area, it is important to get a new auto insurance quote.

For example, if you move from a rural area to a city, your car insurance rates may increase. This is because cities typically have higher crime rates and traffic congestion.

Owning a Home Doesn't Affect Your Car Insurance

Many people believe that homeownership plays a significant role in determining car insurance rates. However, the truth is that while some insurance companies might offer a bundled discount for multiple policies, owning a home itself does not directly impact your car insurance premium. Insurance companies primarily consider factors like driving history, vehicle type, coverage levels, and geographical location when calculating premiums.

A Short Lapse in Car Insurance Coverage Doesn't Matter

Some individuals assume that a brief gap in their auto insurance coverage won't affect their rates. However, even a short lapse in coverage can lead to higher premiums when you decide to purchase a new policy. Insurance companies often view lapses as an increased risk, indicating potential financial instability or irresponsible behavior. Consequently, this may result in higher premiums or difficulty in obtaining coverage from some providers.

You Can't Change Insurance Companies Until Renewal Date

Many policyholders believe that they cannot switch or cancel their insurance policies outside the renewal period. However, most insurance policies can be canceled at any time, and you may be entitled to a prorated refund for the unused portion of the premium. 

It's important to review your policy terms and conditions to understand any potential penalties or fees associated with cancellation. Switching to a different insurance provider can often be done at any time, and it may even result in cost savings or improved coverage.



For example, you can switch to Mike Pierce Insurance. We offer affordable and reliable home and auto insurance. Contact us to know our terms.