Learning About Insurance Coverage For Automobiles

Even though most people have a personal auto insurance policy, there is still a lot of misinformation about how car insurance works. It is important to understand your car insurance policy, so you can make sure your insurance is working well for your personal needs.

Misconception #1: Vehicle Colors Matters

Many people wrongly believe the color of your vehicle impacts your insurance rates. In particular, people believe that red-colored vehicles cost more to provide insurance for. However, this is not true.

Car insurance companies consider many factors about your car, such as its engine type, safety rating, safety features, and age when figuring out what they will charge you for insurance. The one factor that they don't consider, though, is vehicle color.

Misconception #2: Older Is Always Better

Some people believe that getting an older car is always better if you want to save money on insurance. However, that is not always the case. An older sports car, for example, could cost more to provide insurance for than a modern minivan.

Never assume you know what it will cost to insure a specific vehicle. If you are looking to purchase a new car, get the VIN, call your auto insurance, and ask for a quote. That is the best way to know how much the same type of insurance you have right now will cost you for a different vehicle. Older isn't always necessarily cheaper when it comes to car insurance.

Misconception #3: Minimum Coverage is All You Need

Some people believe that minimum coverage is all that they need. However, minimum coverage only provides you with coverage if you injure someone while driving or damage someone's vehicle. Even then, you could easily be found liable for more than your coverage provides for.

It is a good idea to assess your financial situation and increase your required liability coverage. If you can't afford to replace your car, should it be damaged or totaled, you should also consider adding collision and comprehensive coverage to your auto policy.  

Misconception #4: Personal Auto Insurance Covers Work Activities

Finally, many people wrongly believe that personal auto insurance will cover work activities. Your personal auto insurance will cover you when you drive to and from a set place of work. However, if you use your vehicle for work activities, such as making a delivery for a stationary employer, or working for a delivery app, your personal coverage will not cover your vehicle during that period. You will need special commercial vehicle coverage if you want to use your vehicle for work purposes.

If you have questions about how your insurance asks, be sure to ask your insurance agent. Insurance is a complicated field, with lots of different variations and rules from one area to the next, which is why it is a good idea to always ask questions instead of assuming things about your coverage. For more information about personal auto insurance, contact a local insurance agency.