Myth 1: Buying from a Dedicated Agent is Best
It’s easy to think that buying from an agent or rep who works directly for an insurance carrier is the best way to get a low rate, considering the amount of advertising they do. But in reality, the more insurance carriers that you can get a quote from, the more likely you are to get a low rate.
Using an independent insurance agent like The Ross Maghan Agency who deals with many highly rated insurance carriers is your best chance to find the best auto insurance coverage in terms of cost and value.
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Myth 2: Red vehicles cost more to insure
This may have more to do with the behavior and habits of the driver as opposed to the color of the vehicle itself. The paint has no impact on the car insurance premium. Rates are generally determined by:
Your vehicle’s: make, model, engine size, body type, age; the driver’s age, record, and credit history.
Some additional factors include the price of the vehicle, the cost to repair, its safety rating, and its popularity among thieves.
Myth 3: Your credit history doesn’t matter
On the contrary, most states do allow for your credit history to be used as a factor in determining your auto insurance premiums.
Your insurance company will often give you a credit-based insurance score to help determine how likely you are to pay your premiums on time. And some companies will even use your score to determine the likelihood that you’ll file a claim.
Drivers with higher credit ratings are viewed as less likely to get into an accident.
Myth 4: If you’re financing or leasing your vehicle, your insurance company will pay off the balance of the loan if your car is totaled
An auto insurance policy only covers the fair market value of your vehicle – the original cost of the car less depreciation. You are responsible for the difference unless you have GAP coverage.
GAP coverage helps cover the difference between the fair market value and the balance of the loan. It’s extra but may be worth it depending on the amount and length of the loan that you have.
Myth 5: Not reporting an accident will keep your rates from rising
Not only is this incorrect, it could do more harm than good in the long run. Consider that if you get into an accident with another drive, they can still file a claim for damages or injuries.
Eventually their insurance company will file a claim against you and your insurance company. Your premiums are very likely to increase. The accident may appear on your driving record if you receive a ticket as a result of the crash.
Myth 6: Premiums go up as you get older.
While older drivers can seem like a larger risk due to slower reflexes and poorer eyesight, drivers over 65 often qualify for discounted insurance rates; especially those who complete a safe driving course. However, this varies by insurance company so be sure to check with your agent first.
Myth 7: The minimum insurance requirements of New Jersey law are sufficient coverage.
Auto insurance in New Jersey is mandatory and the penalties for not having coverage are becoming increasingly severe. Even though a Basic Auto Insurance Policy is available to all drivers, it offers less protection at a lower rate than the Standard Auto Insurance Policy.
You could be leaving yourself open to risk, loss of assets through wage garnishment, and the right to sue if someone hits you.
There are many more auto insurance myths that we’ll continue to clear up for our readers in the future, but for now you should consider contacting an independent insurance agent who can help you find the NJ coverage that’s right for you.
Give us a call at (732) 566-0003 or use the contact form in the sidebar to request a quote today.