When purchasing car insurance, it’s important to understand what’s true and false about coverage and rates. There are a lot of things you have probably heard that affect your car insurance rate that aren’t true. Here’s what you shouldn’t believe:
The color of your car affects your premium – FALSE. The color of your car doesn’t affect the price of your insurance premium. Just because you have a red car doesn’t mean you will have a higher insurance rate. The history of your driving, make, model and year of the car are factors that affect your insurance premium.
You are not responsible if your friend is driving your car – FALSE. In most states, the insurance policy covering the car is the primary insurance, which means it’s the owner’s responsibility to pay for damages caused by an accident, regardless of who is driving.
Your car insurance covers your rental car – FALSE. You should always check with your insurance company before you rent a car to ensure you have proper coverage that covers a rental car. You might need to have it added to your policy just in case.
Your personal insurance will cover the business use of your car – FALSE. If you use your vehicle for business purposes, your personal policy may not protect you. Although commercial coverage may be more costly, you can keep your rates down by having a good driving record.
Your insurance company won’t look at your credit – FALSE. Most states allow insurance companies use your credit history to determine your car insurance rates. This shows insurance companies how likely you are to pay off a loan in time.