Auto insurance myths

Do red cars really cost more to get auto insurance on?

​So, you are at a cocktail party and you meet a person who states they are an insurance agent.  Hey, congratulations, you are probably talking to the most interesting person in the room. Maybe that’s not actually the case but lets say the insurance agent is the only other person in the room and you have no choice but to talk with him or her. What could you possibly talk about that won’t bore you to death? I have compiled a fascinating list common auto insurance myths. They are great conversation pieces! Feel free to use them even if you aren’t talking with an insurance professional.  They might even make you seem like you are the most interesting person in the room!

Myth 1:
The color of your car impacts your insurance rate!

So, this myth for some reason continues to persist. On the surface it makes no sense that a particular color car would somehow impact your insurance rates. But, some people out there still think it does. Now, the roots of this myth date back to a study that showed certain color cars get more tickets. The old study implied that red cars tend to get pulled over more and in turn the drivers are issued more tickets. Now, tickets do impact your insurance rate, but the color of your car does not.

Myth 2
At age 25 your auto insurance rates automatically go down.

Now, there is some historical accuracy to this myth. Back in the day insurance companies used to be able to use age as a rating factor for auto insurance.  But, that was ruled to be age discrimination. So, insurance companies had to remove age from their rating factors. They replaced it with years of driving experience. Age does still have an impact on your rate, but you will no longer see some magical rate reduction at age 25. Instead you will see a gradual reduction of your insurance rate as you get more years experience driving a car.

Myth 3
You hit a car and did some minor damage to a person’s bumper. The best thing to do is pay out of pocket for the repairs so it doesn’t impact your insurance rates.

In California you will not be charged for an accident if your insurance company pays out less than 1000 for an accident. That means if you scratch someone’s bumper and the repairs and rental car cost comes in at less than 1000 you will not have an accident on your record. That means there is no benefit to not filing a claim if the accident is really minor. Now, if it your auto insurance pays more than 1000 dollars you will have an accident on your record. But, from my experience almost all people would rather use their insurance than pay out of pocket more than a 1000 dollars. Additionally, it is a lot easier to just let your insurance company pay for the repairs. You won’t get a call six months later saying “oh, by the way the person who fixed my car did a bad job, I now need more money”. Just let your insurance company handle it.

Myth 4
My auto insurance will cover me when I drive to Mexico.

Living close to the border we get this question a lot. Now, there are some companies that will pay to get your car fixed if you have an accident in Mexico.  Usually there is a maximum distance they will cover up to. But, here’s the thing. NEVER RELY ON YOUR AMERICAN INSURANCE WHEN DRIVING IN MEXICO! Wow, I just used all caps. I must be serious. There are several reasons to not use your American insurance in Mexico. The first is Mexico doesn’t recognize American insurance companies. So you are basically driving without insurance. Secondly, if you have an accident in Mexico you will most likely be found at fault if you have American auto insurance. You will also be responsible for getting your car back across the border to get it repaired in the U.S.  So, make your life easier so that you don’t have to spend a night in a Mexican jail. Buy Mexican auto insurance before you cross the border.
Those are the four myth’s for the day. I have a few more which I’ll do in a later post. If you have ideas please put them in the comment section or just email them to me. And when you need to get insurance give me a call at 951-395-0754