If you are like most adults today, you know how important insurance is when it comes to securing your financial future. But many people find the process of finding and applying for insurance to be frustrating, confusing, and prohibitively complex. We are here to help! Below we debunk six of the most common myths about insurance. (Pro tip: While this post concentrates on car insurance, do not overlook the importance of property insurance — more than 98% of all insurance claims involve property damage.)
1. Red cars cost more to insure
Believe it or not, red cars do not necessarily cost more to insure. The amount you end up spending on car insurance is determined by the make and model of your car, your driving history, where you live and drive, and several other factors — but your car’s color does not impact how much you pay for coverage.
2. Luxury cars are more expensive to cover
Not necessarily. Most insurance companies do not look at the cost of the car as much as the vehicle’s history of reliability and the average costs of repairs. It is a good idea to speak with an insurance agent to determine whether a car you are considering purchasing will drastically increase your insurance premiums.
3. A single traffic ticket will result in higher premiums
A single ticket probably will not have a significant impact on your premium. On the other hand, if you get multiple moving violations or major infractions, your insurance company is likely to increase how much you pay. Many states offer safe driving classes individuals can take to have points removed from their driving records, which can, in some circumstances, lead to lower insurance rates.
4. Carrying just the minimum required liability insurance is perfectly fine
Liability insurance does not offer the insured any reimbursement for injuries or vehicle damage — it is designed to protect others. If you have an accident and only have liability insurance, you will most likely be on the hook when it comes to paying for your own medical bills and vehicle repairs.
5. Comprehensive and Collision insurance covers everything important
It is critical to understand the difference between liability and comprehensive and collision insurance. Liability insurance protects others, comprehensive and collision insurance extends more coverage to you for physical damage to your vehicle. It often kicks in in the event your vehicle is damaged by fire, water, vandalism or a collision with another vehicle or object.
6. Your credit score is not important
Most insurance companies use credit scores as a part of insurance scoring when calculating premiums. Studies show higher credit scores may correlate to lower incidences of loss and reliable on-time premium payments.
Whether you are looking for life insurance to protect your family or liability insurance for your business, finding the right coverage takes time and effort. Be sure to consult with Cole Harrison Insurance today to get the help you need.