The Reality Behind Car Insurance Myths

Your Insurance Rate vs. Your Credit Score

THE MYTH: Your insurance rate is determined on your credit score.

The Facts: A credit score is used to estimate whether a customer will be late on a payment, whereas a credit-based insurance score is used to anticipate how likely you will file a claim. The following are some of the key criteria that go into calculating an insurance score:

Your Insurance Rate vs. Your Credit Score

THE MYTH: Minimum auto insurance requirements set by the state are the same as full coverage insurance.

Your Insurance Rate vs. Your Credit Score

THE FACTS: Varied states have different requirements for auto insurance limits and coverages, but full coverage is defined as a policy that combines collision and comprehensive coverage. You may not be covered for natural catastrophes if you merely get the bare minimum auto insurance needed by your state.

Your Insurance Rate vs. Your Credit Score

THE MYTH: Insuring a red car is more expensive.

Your Insurance Rate vs. Your Credit Score

The Reality: Unless you've invested in a custom paint job that's different from the factory color, your insurance company doesn't care what color your automobile is.

Your Insurance Rate vs. Your Credit Score

THE MYTH: If someone else drives your automobile, their insurance covers them.

Your Insurance Rate vs. Your Credit Score

THE FACTS: Unless they are specifically specified on the policy, there are no definite rules about who is insured while driving your automobile.

Your Insurance Rate vs. Your Credit Score