There are many myths I’m sure you’ve heard about car insurance and what affects your rates. Well we’re here to set the record straight.
Here are some of the most common myths we’d like to shed some light on:
Myth 1: Red cars cost more to insure than any other color
The color of your car does not impact your insurance rate. What does impact your rate is your car’s make, model, engine size, body type and age. So if you’ve always wanted a red car, but stayed away in fear of increased insurance rates, go out and get yourself the cherry red chariot of your dreams!
Myth 2: Your own car insurance covers you the entire time you’re driving for a ridesharing service
Most car insurance companies do not provide coverage if you are logged in and active on a ridesharing network. Some companies offer the ability to buy an endorsement that will provide your purchased policy coverages while you are driving for a ridesharing service – Plymouth Rock is one of those companies!
While the ridesharing company you’re driving for has you insured, there is a period of time when your rideshare company might be providing coverage at a much lower level than what you have on your personal auto insurance policy. This is commonly referred to as Period 1, the time you turn on your rideshare app until you accept a fare.
Even during Periods 2 & 3 (after accepting a fare, picking up the customer and until your drop them off at their destination) your rideshare company might be offering some coverages that are lower than your personal auto policy. Only a few auto insurance companies offer the ability to buy coverage during Periods 2 & 3 – again Plymouth Rock is one of those companies!
Myth 3: Small cars are cheaper to insure
Your insurance company takes into account many attributes about the vehicles you drive to price your insurance policy.
Myth 4: Thieves prefer to steal new cars
This is a common misconception. Thieves do not often steal cars to keep for themselves, but instead they steal them to part out. Older cars tend to be more lucrative for part outs.
Myth 5: If my friend borrows my car and crashes it, their insurance will pay for the damage
You and your insurance company are responsible for paying for the damage when someone else crashes your car.
Myth 6: Your insurance company will pay off your auto loan if your car is totaled
Car insurance companies pay the fair market value of your car, which could be significantly less than the balance of your loan. It is the owner’s responsibility to pay the difference. The only thing that could help in this situation is if the owner has gap coverage which may help to cover the difference between fair market value and your loan balance.
Myth 7: Credit ratings don’t determine premiums
Most states allow insurance companies to use your credit history to set your rates. Some companies believe that your credit-based insurance score indicates your accident risk. People who have better scores may be viewed as less likely to get into an accident.
Myth 8: Coupes are more expensive to insure than sedans
Just because it’s sporty, does not mean it’s more expensive to insure. What’s important are things like the likelihood it will be stolen, its repair costs and how well it protects everyone in the car from injury in a collision. Again, if you’ve always wanted a cute, sporty two-door whip, don’t let myths about insurance premiums scare you away!