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Money/Finance

5 auto insurance myths you've been wrong about all along

(BPT) - Most drivers “know” for certain just two things about car insurance: they’re required by law to have it, and it’s expensive. Beyond that, there’s a lot of confusion and a lot of misconceptions, according to a recent survey by The Zebra, an online auto insurance search engine that recently introduced the Insurability Score (like a credit score for insurance) to help drivers understand what factors impact their car insurance rates.

A driver’s age, driving record, gender, marital status, location (down to the ZIP code), and what they use the vehicle for all impact their rates. However, some things people think affect their insurance don’t actually factor into it at all. Here are five common myths about auto insurance:

1. The color of your car affects your insurance rate.

Who hasn’t heard the myth that you’ll pay more to insure a red car? Not true! Vehicle color is not a factor in setting insurance rates. However, the car's make, model, age and safety features do affect rates.

2. A parking ticket affects your rate.

Do parking tickets affect your insurance rate? Not as long as you pay them. Parking violations don’t go on your driving record because they’re not moving violations, nor are they risky behaviors that could result in a claim. However, fail to pay them and the municipality you owe may suspend your license, and driving on a suspended license is a moving violation that could result in higher insurance rates. Also, your driving record doesn't permanently affect your insurance rates. Typically after a few years, infractions no longer make an impact.

3. Income affects your auto insurance rate.

How much you earn each year doesn’t factor into your auto insurance rate. However, insurance companies do consider your credit score when establishing your rate. Generally, people with higher credit scores pay less for auto insurance than those with lower scores because they are statistically less likely to file claims. Simple changes to improve your credit score can improve your car insurance rates, too!

4. You can only switch car insurance companies at the end of your term.

Auto insurance isn’t like health insurance; there are no limitations on when you can switch insurance companies. If you find a better rate, you can terminate your current policy and start a new one — just be sure to never have a gap in coverage. Your new policy should begin immediately when you terminate an old one.

5. There is nothing you can do to get a better car insurance rate.

You can actually do a lot to get a better car insurance rate. Drive safely, improve your credit score, and use your Insurability Score to understand how to lower your risk to insurance companies as you shop for a better policy. Comparing rates every six to 12 months could help you find a better deal.

The Zebra's Insurability Score is a free measurement of an individual's risk in the eyes of insurance companies. The Zebra’s patent-pending technology gives each driver a score from 400-950 based on information like their driving record and insurance history, and provides personalized insight into exactly what behaviors and factors affect their unique auto insurance risk (and rates), by how much, and what they can do about it. Visit TheZebra.com to compare auto insurance quotes for free and to get your personalized Insurability Score.

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