Insurance companies use a number of factors to determine your auto insurance premiums, including your driving record, home much you drive your car, where you park your car, your age, your gender, the car your drive, and even your credit.
However, the ways in which insurers use these factors to set your rates is often misunderstood and, therefore, many auto insurance myths abound.
Let’s set the record straight on a few of the most prevalent auto insurance myths out there.
Myth 1 – A Red Car Equals Higher Premiums
For a long time, many people have claimed that a red car costs more to insure because red cars are said to be to linked to aggressive driving and speeding. In fact, auto insurance premiums are based on the make, model, body type, engine size, and age of your car, as well as drivers on your policy. It doesn’t actually matter what color your car is.
Myth 2 – Older Drivers Pay More for Auto Insurance
Older drivers don’t necessarily pay more for auto insurance. In actuality, drivers over the age of 55 can sometimes qualify for a reduction in their auto insurance premiums for three years if they complete an accident prevention course.
Myth 3 – You Only Need the Minimum Coverage Required by Law
Nearly every state requires you to buy a minimum amount of auto liability coverage, including Ohio. But the minimum amount of coverage is often not enough to cover the cost of a car accident. If you only buy the minimum amount of auto insurance coverage, you may end up paying a lot more out-of-pocket for losses.
Myth 4 – My Premiums Will Skyrocket After One Speeding Ticket
In most cases, your rates will not go up because of a single speeding ticket. You will usually need to get two tickets before you see your rates increase. Whether or not your insurer increases your premiums depends on your driving history, how long you’ve been insured with the company, and how fast you were driving at the time.