Debunking Common Myths About Car Insurance

Car insurance rates are an enigma. You pay one price, your spouse pays another, and your neighbor pays yet another price for a service that the law requires all drivers to purchase. Because there is so much “mystery” surrounding car insurance, people tend to fill in those gaps with erroneous information. We want to set the record straight for you. Here are a few of the common myths about car insurance, and the truth about what you should know.

Myth: You only need the minimum amount of car insurance required by Maryland law to protect you.

Truth: This is partially true. Legally, you do only need the minimum. However, buying only the minimum amount of insurance required by state law would require that you pay more out of pocket for losses related to the accident. The law requires $30,000/$60,000 for bodily injury insurance, $15,000 in property damage liability, and uninsured motorist coverage (UM). However, a car crash can lead to injuries and property damage that exceed these minimum numbers. Without enough insurance, you could be responsible to pay a large verdict against you if you caused the accident. On the other hand, if you were injured by someone without enough insurance the results could be catastrophic for you and your family.

Myth: Your car insurance rates will not go up if you do not report an accident.

Truth: Just because you do not report the accident to your insurance company, does not mean that another driver won’t report it. If this happens, you will see an increase in premiums. Also, if you were issued a traffic ticket because of the accident, this could cause your rate to increase.

Myth: Your car insurance rates will rise as you grow older.

Truth: Your car insurance rates could actually drop as you get older. Drivers over the age of 55 may qualify for discounts, and those who are retired and drive less may also qualify for a discounted rate for car insurance. Drivers with a long history of safe driving may be entitled to additional discounts, too. It depends on which policy you buy, and from which company you purchase it.

Myth: If a friend is driving your car and he causes a crash, his insurance will cover it.

Truth: Car insurance follows the vehicle rather than the driver. If your friend is driving your car and causes an accident, you will file the claim and pay the deductible, and your rates will likely increase. If you tend to loan your car out to friends or family to borrow, you should review your policy, and speak with your agent about what would happen if another causes an accident.

Myth: Your car insurance will cover business use of your vehicle.

Truth: Not always. If you want to use your personal vehicle for business uses, such as working for a ridesharing service like Uber or Lyft, you should check with your insurance company to see what your policy covers. The ridesharing services provide insurance coverage for their drivers that covers them when they are “on the clock” with a customer.

Bonus myth: Red cars are costlier to insure.

Truth: Okay – we couldn’t resist this old chestnut. The color of the vehicle has no bearing on determining premiums.

What does determine the cost of car insurance premiums?

A major auto insurance company looks at the seven broad categories that affect your car insurance premiums:

• Your policy and deductibles
• What you drive
• How often and how far you drive
• Where you live
• Your driving record
• Your credit history
• Your age, sex and marital status

In Maryland, where you live is a major factor in how much you will pay for car insurance. In a research study, the Maryland Consumer Rights Coalition found that many drivers pay $150 to almost $700 more for car insurance in one neighborhood than they would pay in an adjacent neighborhood.

Plaxen Adler Muncy, P.A. is a premier personal injury law firm which protects the rights of those injured in accidents caused by negligence. With more than 35 years of experience helping clients recover compensation, you can rely on us to help. Please call 410-730-7737 to schedule a consultation with an experienced Maryland car accident lawyer now, or fill out our contact form.