Is a Car Insurance Myth Holding You Back?

Is a Car Insurance Myth Holding You Back?

Myths abound about pretty much anything. Sometimes, they are harmless. Sometimes, though, they can be costly. For example, maybe you have always wanted a red car but avoided them because you heard that they are a lot pricier to insure. Guess what? They’re not. Here’s a look at this myth and at a few others.

Myth: Red Cars Cost More to Insure

This myth seems to be fairly common among Millennials. Fortunately, the color of your car shouldn’t make a difference in insurance rates. The top factors insurers want to know about tend to be the car’s make and model, engine size, and age. Insurers also want to know about your driving history, your credit history, where you live, how much you will be driving the car, and who else will be driving it. But the color of the car? No matter.

You could even argue that red may be more a popular color choice among, say, adventure seekers. These folks may be more likely to have blemishes in their driving records. However, it is these blemishes—not the choice of a red car—that increases insurance premiums. So, don’t let this myth hold you back from getting the red car of your dreams. Your insurance rates should be the same if you went for the same car, only in white, blue, or black.

Myth: An Agent for an Insurance Company Will Help You Get the Best Rate

A personal touch goes a long way for many things. For example, some shoppers opt to pay more for a product because of the customer service they get with it. However, saving money tends to be the primary concern of quite a few people who shop for car insurance. If you call a car insurance agent at a large carrier, it’s doubtful you will get quoted the lowest rates possible. Why is this?

First, the need for obtaining multiple quotes is well-documented. Each insurer views factors such as credit history and ZIP Code differently. You could end up paying a lot more with one insurer than with another. If you speak to only one agent and one insurance company, you limit your options.

Tools such as enable you to compare quotes from multiple insurers after entering your data only one time. You’ll be asked questions such as the primary purpose of your car, how many daily miles you drive, and whether you own or lease. If an ongoing, personal relationship with an insurance agent is important, you can factor that into your final decision-making process.

Myth: Once You’ve Chosen Insurance, You’re Set

Okay, so this one may be more wishful thinking than a myth, per se. After all, how nice would it be to choose an insurance plan and be done with it? To never have to worry about it again? Not realistic, though. And inertia or simple forgetfulness could indeed be holding you back.

Take a few scenarios. When you set up your car insurance:

  •          Your kids (then in high school and/or college) were listed as driving your car.
  •          Your car was brand new.
  •          You’d had an accident or two in the past few years.
  •          Your credit history was shaky.

Since then, your life has probably changed. Maybe your kids no longer drive your car. You may also have improved your credit history and had no more car accidents. Your car has definitely aged, too. However, your car insurance is set for an entirely different life situation—and it’s costing you money. You’re not on your insurer’s safe driver program, and the insurer sees you as somewhat of a risk due to outdated credit history reports. Perhaps most costly, the car that would have cost $30,000 to replace 10 years ago now would cost only, say, $5,000 to replace.

It’s time to lift the burden on your wallet. Take a look once a year (at the very least, once every two years) at your current car insurance needs. That goes for all of your insurance needs, actually.

Here’s something extra, another myth that isn’t necessarily holding you back but that could end up hurting you in the future. It goes like this: Your state’s minimums are recommended insurance amounts. They’re not. They really are only minimums; it’s best to go above and beyond.