Michigan is known for its great lakes, stunning views, and auto manufacturing industry. As a resident of Michigan, owning a car is essential, but along with it comes the responsibility of purchasing auto insurance. Despite being a mandatory requirement, many people have misconceptions about auto insurance that can lead to costly mistakes. In this blog post, we will debunk common myths about auto insurance using statistical data.
What are the most common auto insurance myths in Michigan?
Myth: Red cars are more expensive automobiles to insure.
Fact: The color of your car has no effect on your insurance premium. Factors that determine your premium include your driving record, age, type of car, and location. According to a study by Insure.com, the color of your car does not affect your insurance premium.
Myth: The minimum required auto coverage is sufficient.
Fact: Michigan requires drivers to have no-fault insurance, which covers medical expenses, lost wages, and property damage. However, the minimum required coverage may not be enough to cover the costs of an accident. According to the Insurance Information Institute, the average cost of a bodily injury claim is $18,417, and the average cost of a property damage claim is $4,525. It's recommended to carry higher coverage limits to protect yourself from financial loss in case of an accident.
Myth: Your credit score doesn't affect your auto insurance premium.
- Fact: Your credit score can affect your insurance premium. According to a study by the Federal Trade Commission, people with lower credit scores pay higher auto insurance premiums. Insurance companies use credit-based insurance scores to determine the risk of insuring a driver. It's important to maintain a good credit score to keep your insurance costs low.
Myth: Older cars have cheaper auto insurance rates.
- Fact: The age of your car is not the only factor that affects your insurance premium. Other factors, such as the make and model of your car and the cost of repairs, also play a role. According to a study by the Insurance Institute for Highway Safety, newer cars are generally safer and have lower insurance losses, which can result in lower insurance premiums.
Myth: Your auto insurance will cover everything in an accident.
- Fact: Your insurance may not cover all the costs of an accident. You may be responsible for paying a deductible, which is the amount you pay out of pocket before your insurance coverage kicks in. Additionally, if the cost of the damages exceeds your coverage limits, you may be responsible for paying the difference. It's important to understand your insurance policy and its limitations to avoid unexpected expenses.
Auto insurance is a complex topic, and it's essential to understand the facts to make informed decisions. Don't fall for common myths about auto insurance. Instead, use statistical data to make informed decisions that protect your finances and your safety on the road.