If you’re shopping for a new car or renewing your auto insurance, you may have heard that red cars come with higher insurance premiums. This claim, along with other auto insurance myths, can create confusion for car owners trying to understand their policies and manage costs. At BlackArrow Insurance, we believe in clearing up misconceptions to help you make informed decisions. Here’s a closer look at whether color impacts your premium and the truth behind other common auto insurance myths.
Many people believe that red cars, often associated with sporty models and speed, carry higher insurance rates. The truth? Your car’s color doesn’t factor into insurance premiums. Insurers focus on characteristics like the car’s make, model, engine type, safety features, and age. Red or any other color doesn’t signal a higher risk or higher premium. So, if you love a red car, don’t let this myth keep you from buying it!
While it’s true that some drivers drop comprehensive and collision coverage on older cars with low market value, it’s not a rule for everyone. If your older car still holds significant value or is essential for your daily routine, maintaining these coverages can protect you from costly out-of-pocket expenses after an accident. Consider the car’s current market value and your financial situation to decide if additional coverage makes sense.
Many assume auto insurance only applies while they’re actively driving, but coverage extends to several situations. For example, if your parked car is damaged by severe weather, vandalized, or stolen, your comprehensive coverage can protect you. Similarly, personal injury protection or medical payments coverage can help with injury-related expenses regardless of who was driving. So, your policy covers more than just driving accidents.
In many states, your credit score can play a role in determining auto insurance rates. Insurance companies have found that individuals with higher credit scores are statistically less likely to file claims. While not allowed in every state, in places where it’s legal, a good credit score could help you secure lower premiums. Check with your insurer to see how this may impact your rates.
While minimum coverage satisfies state requirements, it may not be enough to protect you fully in an accident. Medical expenses, property damage, and legal fees from a severe accident can quickly exceed minimum liability limits, leaving you responsible for any remaining costs. Considering higher liability coverage can offer valuable peace of mind and financial protection, even if it slightly increases your premium.
In most cases, auto insurance follows the vehicle rather than the driver. If a friend borrows your car and causes an accident, your insurance would typically be responsible for covering the damages. This means that any claims could affect your premium, not theirs. Always be cautious about who you allow to drive your car, as lending it out could impact your insurance costs.
“Full coverage” is a term that’s commonly misunderstood. While it generally refers to having both liability and comprehensive coverage, it doesn’t mean that every scenario is covered. Most full coverage policies don’t include items like roadside assistance, rental reimbursement, or custom parts. If you need extra protection, talk to your insurer about additional options to fill in any gaps.
While accidents and traffic violations are common factors in rate changes, there are other reasons your premium might increase or decrease. For example, moving to a different neighborhood, updating your policy, or even changes in state regulations can impact your rate. In some cases, routine adjustments are made based on your area’s claims data, even if you haven’t had an accident.
It’s true that some sports cars are more expensive to insure due to higher repair costs and risk factors, but it’s not a hard-and-fast rule. Premiums are determined by various factors, such as the car’s age, safety features, and your driving record. Some newer sports cars with advanced safety features can be less expensive to insure than older models that lack these updates.
If your car is totaled, your insurer generally pays you the car’s actual cash value (ACV), which is the current market value of the car before the accident, rather than the amount needed to buy a new one. Unless you have gap insurance, which covers the difference between your loan balance and the car’s ACV, you may still owe money if your car is financed. Without gap coverage, you might need to cover that remaining balance out of pocket.
Auto insurance can be complex, but understanding the facts can help you make decisions that fit your needs and budget. At BlackArrow Insurance, we prioritize transparency and work with you to find policies that offer the best value. Contact us today to learn more, and let us help you navigate the ins and outs of auto insurance with confidence.
Whether you're deciding on gap insurance, considering higher liability coverage, or curious about full coverage, we’re here to answer your questions and provide personalized guidance. Skip the myths, embrace the facts, and drive with peace of mind.
