Common Car Insurance Myths
The Insurance Information Institute (“I.I.I.”) released Eight Common Car Insurance Myths. Here is a summary of the eight myths from the I.I.I.:
- Color determines the price of auto insurance – not true. The main price driver is type of car, including make, model, age, etc.
- It costs more to insure your car when you get older – not true. Many people 55 and older can actually qualify for reductions.
- Your credit score has no effect on your car insurance rate – not true. Insurance companies look at your credit score to help determine a car insurance rate.
- Your insurance will cover you if your car is vandalized, stolen, or damaged by hail, fire or flood – depends. If you have comprehensive coverage then you are probably covered, but if you only have liability coverage then you may not be covered.
- Minimum coverage will protect you if you are in a car wreck – depends. If you are in a serious wreck where you cause significant property damage or personal injury you may be at risk. You should purchase enough insurance to protect your assets, minimum coverage may not be enough.
- If another person is driving your car, his/her insurance will cover a wreck – partially true. The person driving your car, assuming they have car insurance, will be secondary coverage. The insurance for the car involved in the wreck is primary, which means it will pay first. A simple way to remember this is insurance follows the car. This is specific to Georgia, other states may differ.
- Soldiers pay more for car insurance – not true. If you are a soldier make sure your insurer knows this, you may be entitled to a discount.
- Personal auto insurance covers both personal and business use of your car – this may not be true. Many car insurance policies exclude business use on personal policies. So, if you use your personal car for business use, make sure the car is covered.
One more myth that is unique to Georgia: “my insurance rates will rise because I made a claim on my uninsured motorist coverage.” – not true. An insurer cannot raise your rates because you made an uninsured motorist claim stemming from a wreck that was not your fault. O.C.G.A. 33-9-40.
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Posted in: Automobile Wrecks