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Auto Insurance Facts: 5 Surprising Facts You Didn’t Know

Updated: April 30, 2018

Whenever someone is looking to get a new car, they read a lot of auto insurance information to prepare themselves for the process.

There are still a lot of facts about car insurance rates and coverage that people are not fully aware about.

Getting complete auto insurance information is the best way to ensure that an individual gets the type of policy that helps them the most.

There are a lot of misconceptions and hidden facts about auto insurance rates and coverage that no one knows about.

Here is a look at five surprising facts about auto insurance rates and coverage that few people understand.

Belongings are Not Covered even with Full Insurance

Even if someone gets a full scope of auto insurance coverage, which includes liability, comprehensive and collision coverage, they do not have insurance for their belongings inside a vehicle.

If an individual wants to get their belongings inside a car insured, there are ways to tie homeowners’ insurance or renters’ insurance to these items.

If an accident occurs and these belongings are damaged or lost, there is no stipulation in auto insurance contracts that means an insurance company will pay for the damages to these items.

There is also the danger of someone breaking into your vehicle and stealing something that you left there overnight. This is extremely common in suburban neighborhoods where people forget to lock their vehicles.

If an individual wants to get their belongings inside a car insured, there are ways to tie homeowners’ insurance or renters’ insurance to these items. This will ensure that all your expensive or valuable items that stay in the car are covered in the event of theft, vandalism or a really bad accident.

When you get the required add-ons to cover these items through homeowners’ or renters’ insurance, make sure to keep the receipts of everything you bought.

Car Insurance Covers Taxes and Fees

Getting a vehicle completely wrecked in an accident is extremely unpleasant. Not only do people often have injuries or long-term disabilities from these heavy accidents, but they probably need to get a new vehicle.

When getting your auto insurance quote, be sure to ask the company whether they cover this cost.

Cars that receive a lot of damage are often cheaper to replace than repair, especially if they are older. In this case, you might be looking at replacement vehicles. No matter what the price of the replacement car, it will come with a certain number of taxes and fees.

Contrary to popular belief, these taxes and fees are covered by a lot of auto insurance policies. When getting your auto insurance quote, be sure to ask the company whether they cover this cost.

Sometimes these taxes and fees are paid along with the settlement for the car replacement. In other cases, they are paid later when the car is purchased and you know the associated taxes and fees. The specific policy depends on each company and the state where you live.

This is one of the reasons it is so important to study an auto insurance policy before committing.

Coverage for Pet Injuries is Separate

Everyone knows that auto insurance extends to every passenger who was inside the vehicle at the time of the accident. This means that if a policy pays for the driver’s medical expenses, it also pays for the expenses of other passengers in the car at the time.

Other companies may offer the pet coverage as an add-on to their auto insurance policies.

However, some auto insurance policies do not provide coverage for dogs or cats you may have in the vehicle at the time. There are a few companies that offer up to $1,000 in coverage for vet bills resulting from accident injuries. It is important to check with a company about this clause when they offer an auto insurance quote.

Other companies may offer the pet coverage as an add-on to their auto insurance policies. This means that collision coverage and personal injury protection from these insurance providers will not cover pets.

Drivers also have the option of getting separate pet insurance from another company, which covers injuries sustained in accidents.

By assessing the price difference between separate pet insurance and the pet injuries add-on from the car insurance company, drivers can make an informed decision.

Credit Score Impacts Insurance Rates

Contrary to what a lot of people think, credit scores impact auto insurance rates in a big way. In fact, one of the first things companies do when you ask for an auto insurance quote is to check your credit score.

Car insurance rates are impacted by about 25 percent by a person’s credit score. This is one-fourth of the entire auto insurance quote determination process.

By looking at a person’s credit score, the auto insurance company gets a basic idea about the person’s credit history and reliability. A high credit score translates to lower premiums, while a lower credit score means higher monthly premiums for the same type of coverage.

Car insurance rates are impacted by about 25 percent by a person’s credit score. This is one-fourth of the entire auto insurance quote determination process. Other factors will include a person’s age, driving history, car make and model, location and miscellaneous factors.

If you want to save money on auto insurance in the future, it is best to get a handle on your credit score.

Start paying bills on time, try to eliminate outstanding debts and do not make late credit card payments or get bank overdrafts. A lower credit score helps with getting auto insurance, loans, credit cards, mortgages and more.

Brand Loyalty Has an Impact on Policyholders

Brand loyalty is something that has an impact in all industries and for all types of consumers. Even if a person believes that they have a great auto insurance policy from a solid company, there is room for improvement.

Statistics show that it is best to shop around and see different car insurance rates at least one time a year.

Customers who demonstrate brand loyalty will not ask for another auto insurance quote from some other company, because they are happy with what they have. This is a good for peace of mind, but it means that the individual is missing out of many great discounts and offers from other companies.

Statistics show that it is best to shop around and see different car insurance rates at least one time a year.

Not only will this encourage the existing company to make discount offers, but it can present a huge money savings opportunity for drivers if they switch to another company after a year or two.

As long as the driver is careful to request the same type of coverage as they currently receive, there is no risk of losing coverage when getting discounted policies from other companies.