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Debunking Auto Insurance Myths
Myth: Driving a red car will result in higher rates.
Reality: Many people mistakenly believe that people who buy red cars are more aggressive, reckless drivers. However, there is no quantitative evidence to support this claim. In fact, auto insurance companies don’t even consider the color of your car as a factor in pricing your policy. They do look at your car’s year, make, model, price, and engine size.
Myth: You’ll pay more for auto insurance as you get older.
Reality: Car insurance providers often reduce rates for older policyholders, because they view them as safer, more experienced drivers. Some insurers even lower rates by up to 10% for three years for drivers who are aged 55 and over and complete a safe driving course.
Myth: Your credit score has no effect on your auto insurance rate.
Reality: This issue is not so simple. Most car insurance companies use what are known as credit-based insurance scores to determine how much they charge you. Unlike regular credit scores, they don’t take your employment, income history, or gender into account. They only use your credit history to determine the likelihood of you filing a claim in the future. However, if you live in California, Hawaii, and Massachusetts, companies are banned from using credit-based insurance scores to set their prices.