The Oh-So-Mythical Automobile Insurance

"If my car is red, I'll pay a higher car insurance rate." Does the color of a vehicle have any bearing on how car insurance premiums are determined? "My credit history and score doesn't effect what I pay in car insurance...does it?" It doesn't seem to make sense, but can a car insurance company check your credit in order to determine your rate? "If I have no-fault insurance, it means I can never be at fault in a car accident." There are many myths and misunderstandings associated with car insurance. Let's see if we can make sense out of some of the most popular, and help you make appropriate choices regarding your own insurance based on facts instead of myths.

Car Color and Auto Insurance

For years, people have believed that red cars caused insurance companies to charge more for insurance. Some believed it was because it is harder to see brake lights on a red car as compared to a car of a different color (the lights and car are the same color). The color of your car has absolutely no impact on what you pay in car insurance, instead- your vehicle's make, model, and year, as well as the size of the engine, your personal driving record, marriage status, and even your credit history are all taken into consideration when your premium is determined.

Other Drivers

Have you ever let a friend borrow your car because you think that his or her own insurance company will pay for any damages if your friend gets into a car accident while driving it? If so, you're letting a friend borrow the car based on a car insurance myth! If someone else borrows your car and gets into an accident, it is still your responsibility . What's more, you don't even have to be there if there is an accident, you will receive a negative mark on your insurance record, and most likely a rate increase.

No Fault Coverage

Having no fault insurance does not mean that you cannot be at fault for an accident. No fault coverage actually exists in order to pay for your damages whether you are at fault, the other driver is at fault, or in the case that fault cannot be determined.

New Vehicles

When you purchase a new vehicle, do you think that your existing car insurance policy automatically covers you and your new car? Most of the time, your automobile policy must be updated to reflect the new vehicle with a certain amount of time or your insurance will not cover you in the new vehicle.

Young Male Drivers Pay More?

How often have you heard that male drivers under the age of 25 pay more for their automobile insurance than anyone else? This is actually a partial myth! The fact is, automobile insurance companies consider the risk of insuring groups of people based on their accident statistics . Teenagers of either gender, and the elderly will tend to pay more in car insurance, while unmarried, male drivers under the age of 25 may be required to pay higher premiums than females in the same age group because they have statistically been shown to be in more accidents.

Credit Scores and Insurance Rates

Whether it seems fair or not, your credit score really does effect your insurance rate. In fact, some insurance companies even take your credit history into consideration before making the decision to renew your auto insurance policy or not!