Top 5 Auto Insurance Questions

Before you buy auto insurance, make sure you understand your policy. There is some misinformation that all drivers should know when insuring their vehicle and we are here to separate the fact from fiction:

1. The color of my car affects my auto insurance premium?

False! We are guessing that this myth probably started due to sports cars being typically bought in bright colors like yellow, red or orange. People assumed these colors were more of a risk and the people who drove them, causing a higher rate. In reality, when it comes to determining your auto premium, insurance companies are only interested in the year, make, model of your vehicle and the driving record of the insured. When it is all said and done, the color of your vehicle does not affect your auto premium. The color of your car may be your top priority; however, it really does not matter to your insurance company.

2. Does where I live matter?

True! If you compare a driver living in an urban area vs. a driver living in rural area, the driver living in the urban area will have a higher auto insurance premium simply because theft, vandalism, etc. are higher in the urban areas. No matter where you live, it is important to purchase both collision and comprehensive coverage in order to fully protect your vehicle from all types of damage situations. Comprehensive coverage pays for damages to your vehicle that is not a result of a car accident. This includes glass breakage, theft, vandalism, fire, hail and accidents involving animals. Collision coverage pays for damage to your vehicle as a result of a car accident.

3. If I purchase a new vehicle, my insurance company will automatically know?

False! If you purchased a new vehicle, you will need to contact your insurance company and let them know that you purchased that vehicle so they can add it to your auto policy; do not leave it up to the car dealership.

4. My credit score affects my auto premium?

True! Unfortunately, insurance companies do pull credit scores when writing and renewing your auto insurance. Insurance company’s data show that people with higher insurance scores have fewer claims. Someone with a lower credit score may pay a higher rate for their insurance premiums vs. someone with a higher credit score.

5. I only need the minimum amount of auto liability insurance that the state requires?

False! Almost every state requires you to purchase a minimum amount of auto liability coverage. In Virginia, the minimum coverage is 25,000/50,000/20,000 but more than likely you will need more insurance coverage than the state requires. Bodily injury and property damage claims can easily exceed the minimum limits and you have to prepare for the unexpected. If you buy only the minimum amount of coverage, you will be paying more out-of-pocket for losses suffered after an accident and those costs may be extremely expensive.

 

*While these are helpful tips, each situation is unique and should be examined on a case-by-case basis. For further information, please consult your insurance policy or discuss with your insurance agent.