10. Each state has its own requirements for liability insurance. FALSE. FALSE. While liability insurance is required by most states, there are some exceptions. It is not a good idea for anyone to drive without liability coverage, regardless of whether liability insurance is required by the state. You could be sued if you are found at fault in an accident and have no liability coverage.
9. Standard collision coverage covers me against damage caused by hail, windstorms, animal accidents, theft, and hail. FALSE. FALSE. For example, many drivers mistakenly believe that collision coverage will cover them if they hit a deer. This is false.
8. My insurance policy covers my new car automatically. False and true. True and False. While many insurance companies will cover a new car, it is temporary coverage. It is up to you to inform them of the vehicle in the time frame specified in your contract.
7. My insurance will cover me for any injuries if my friend is in an accident with my car. FALSE. FALSE. Your insurance must cover your car because it is yours. Although the insurance of another driver may be used to cover excess damages, your insurance pays for all costs. Your insurance score could be affected even though you weren’t at the scene of an accident.
6. Red car drivers pay more for auto insurance. FALSE. The car’s color can have an effect on car insurance rates. This is a common misconception. The actual fact is that the vehicle’s color does not impact the premium. Your premium will be affected by the make and model, safety features, location, and city where you live.
5. No-fault insurance guarantees that my premium will not be affected even if my accident is my fault. FALSE. FALSE. This does not mean your insurance score will be unaffected or your premiums will not go up.
4. The highest insurance rates are paid to males younger than 25 years of age. FALSE. FALSE. Senior citizens and teens typically have the highest rates because they are more likely to be involved in accidents than the rest of the population.
3. You can simply let your current policy lapse if you want to change insurance companies. FALSE. False. Your credit score can be negatively affected by letting your current policy lapse. You should notify your insurance company in writing that you wish to change insurance companies. They will also need to pay any premiums or fees that you may have.
2. My personal insurance will cover me for my business use of my vehicle. FALSE. FALSE
1. My credit score doesn’t affect my insurance rates FALSE. However, your credit score can play a minor role in setting your rates. If drivers have good credit ratings, they will be rewarded with lower rates. Companies may review your credit rating when you shop for auto insurance. This type of inquiry is known as a “soft inquiry”, and it does not adversely affect your credit rating. Credit card companies, banks, and other lenders can make inquiries that could negatively impact your credit score.
