Top 5 Auto Insurance Myths
What are the top auto insurance myths?
Auto insurance can be a tricky topic to navigate. With so many myths and misunderstandings circulating, it’s important to prioritize accurate information over hearsay. To help you make sense of auto insurance, here are the top 5 auto insurance myths that you should know about:
Myth #1 – The color of your car can affect your auto insurance rates
Wrong. Companies do not set insurance rates based on the color of your car. The old myth that red cars cost more to insure is just that, a myth. It was probably started back when the red sports cars were popular. Therefore, those cars were more to insure because of the types of cars, not just because they were red.
Myth #2 – Your credit history will not affect your rates
Your credit history can and will affect your auto insurance rates with most companies in Maryland and most other states. The insurance companies have statistics which show that drivers with lower credit scores are involved in more accidents.
Myth #3 – If you let someone drive your car, their auto insurance will cover them
The coverage for car insurance usually follows the car being driven. Therefore, if yoy loan your car to your friend, it will be your auto insurance that will provide the primary coverage for any claims that may happen. Your friends auto insurance may kick in after your policy limits are exhausted. This would be determined by the coverage selected and the actual policy terms and conditions.
Myth #4 – Your personal auto insurance policy will cover business use of your vehicle
Many people wrongly assume that there will be coverage on on a personal auto insurance policy if you use the car for business purposes. But this is unfortunately not the case if you only have personal insurance coverage and haven’t stated it will be used for business purposes. It’s important to make sure that your insurer knows what kind of use the car will get in order to get the right kind of coverage. This ensures that you are protected against any unfortunate incidents. Being clear and honest about how you intend to use your car can save you money and worry in the long run.
In recent years, this has become an even bigger issue with the increased popularity of home based businesses, rideshare apps (like Uber and Lyft), food delivery apps (like Doordash, Uber Eats, Grubhub). If you participate in any of these, it is imperative that you talk to your insurance agent. You do want to find out that you are not covered AFTER you have an accident.
Myth #5 – Your auto insurance company can cancel your insurance at any time for any reason
Insurance is a heavily regulated industry. There are state regulations that prohibit insurance companies from cancelling our insurance in the middle of a policy term unless they have an approved reason. One reason can be for non payment of premium. But even then, they have to give notice that meets specific requirements before cancelling. Fraud or misrepresentation can be other reasons for a mid term cancellation of a car insurance policy.
There are reasons that your policy may be cancelled. But the insurance company cannot just do it at any time for any reason. And these reasons must be filed and approved by the state insurance commissioner’s office.
Contact Huff Insurance – 410-647-1111
Now that we’ve busted some of the top auto insurance myths, you should feel more confident when shopping for a policy. The bottom line is that you need to make sure you have the coverage that fits your needs. If you have any questions about what kind of coverage is right for you, give us a call or contact us and we’d be happy to help.