What Really Causes Insurance Rates to Change?
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Determining fact from fiction can be tricky when looking at auto insurance. Rumors can sound true, especially if you have experienced them yourself. However, what may seem like a fact to you may really be a myth. Car insurers take many factors into account when increasing and decreasing rates. Coincidences can happen and very often result in the myths we’ve all come to believe.
One Speeding Ticket Increases Premiums
This one can be true; however, it usually takes at least two speeding tickets for your rates to increase. Another factor that is considered is how far over the speed limit you were going. Five miles over will not increase your premium, while twenty miles over may very well raise your rates.
An auto insurer normally allows the first speeding ticket to pass without punishment. However, a second ticket leads your auto insurer to believe you’re a dangerous driver and more likely to cause an accident. This is what leads to premium increases.
Rates Are Determined Based On Car Color
This one is false, even though it may seem true. Think about the last time you purchased insurance. Did they ask for color? No. So where does the color myth come from? Certain color vehicles are more popular than others. For instance, red is a popular color. The more red cars on the road, the more likely a red car is to be in an accident or pulled over for speeding. The same would hold true if the color was green, yellow, brown, or any other color.
Certain color cars only have higher premiums if they are in accidents or have multiple speeding tickets. The best way to prevent higher insurance rates for popular color cars is to be careful and drive the speed limit to avoid becoming a statistic.
Auto Insurance Isn’t Regulated
Despite how it may seem, auto insurers are actually regulated. The regulations may still not be enough for most car owners, but regardless, regulations are in place. Each state has its own set of regulations for auto insurers, so rates vary from state to state. Before any increases occur, they must be approved. If increases occur before approval, owners may receive refunds.
Regulators must review all insurers and the way they calculate rates. In order to stay in business, insurers must meet the regulator’s approval.
You’re Not Responsible for Other Drivers
As unfair as it is, you can be held responsible for anyone driving your car. Obviously, this isn’t the case if your car is stolen. However, letting a friend or family member borrow your car is the same as driving it yourself. The owner’s auto insurance is considered the primary policy and must pay for any accidents. The only time the friend or family member’s policy will cover costs is if your policy doesn’t cover all the costs incurred by the accident.
Car Insurance Rates Are Cheaper at Age 25
Rates are higher for younger and older drivers simply due to inexperience and health issues. The reason rates seem to decrease around age 25 is due to the driver’s experience. By the time a driver turns 25, they are usually past the age of fast and reckless driving. As a driver becomes more experienced and careful, their rates will drop. The link between age and rate depends solely on how clean a driver’s record is.
Anytime you have a question about car insurance myths, talk to your insurer or research the myth before placing blame. Many myths are just coincidence. Auto insurance rates fluctuate due to health, accidents, speeding tickets, location, and driving distance. By looking at common myths, you can see how these factors are the real reason behind rate changes and not they myths. So what are you waiting for now? Go now and get a prestige vehicle insurance with laplayainsurance and experience amazing benefits and get great deals.