Myths and Realities of Auto Insurance

Myths are common in the auto insurance industry because of the mystery surrounding the criteria for car insurance rates and the variety of coverage options available. In this post we’ll debunk some of the most common myths of auto insurance and lay out some of the important realities.

MYTHS

Red cars are more expensive to insure.

Insurance companies don’t ask for the color of your car when calculating quotes because it isn’t a necessary factor.

Cheaper or older cars cost less to insure.

It depends. If your cheaper or older car is, for example, an unusual model, it can cost more to insure than a pricier car. Simply put, car insurance rates depend on several factors.

Comprehensive coverage protects drivers in all situations.

Comprehensive coverage protects your car against damages outside of a collision. This can include a wide range of events like falling objects, fire, vandalism, theft and weather (floods, hail, etc.), but what it exactly covers is dependent on your car insurance policy.

REALITIES

An accident can make insurance rates go up.

Generally speaking, the severity of the accident and the cost of the claim will determine if there will be an increase in your rate. If you are in an accident where you’re found at fault, there can be an increase in your auto insurance rate at its renewal period based on the claim.

Personal information, vehicle information and driving history are used to determine auto insurance rates.

Insurance companies generally consider a variety of data including personal information such as age, sex, marital status and additional drivers on the policy, vehicle information (make, model, year), and driving history such as how often and how far an insured drives and their driving record. Many insurance companies also ask for credit score, but Active Insurance works with companies that don’t use credit history so insureds are eligible to receive the best rates, even if they don’t have the best credit score.

City dwellers pay more for auto insurance.

Where you live influences your auto insurance rate. People who live in cities generally pay more for car insurance than rural residents because there’s a higher risk for claims due to increased traffic, accidents and theft.

It’s important to know the myths and realities of auto insurance because auto insurance is mandatory for all drivers, and quotes are based on several factors. Contact Active Insurance for more information about car insurance quotes in Chicago. We provide a variety of options that fit the needs of Illinois drivers.

 

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What causes auto insurance rates to increase?

Several factors can lead to a higher auto insurance premium. Insurance companies (insurers) lose money when they cover drivers who get into accidents and make claims, so it’s in their best interest to predict driver risk factors that indicate a higher chance of a claim and charge the driver an increased premium to compensate for the elevated probability of a payout.

Based on this knowledge there are many factors that can lead to increased premiums, but some of the most popular ones include:

Accidents

If you file an accident claim with your insurance company, your premium will increase at its renewal period based on the claim.

Violations

If you are convicted of a moving violation, your premium rate may increase at its renewal period. Your driving history, length of time you’ve been insured with a company and speed you were going when cited can affect whether your rate increases or not.

Moving

Where you live (zip code) influences your rate. If you move to an area with higher theft or accident rates (city versus a rural town for example), your renewal premium could reflect this change.

New Car

A new car is worth more than an older model and will cost more money to replace if it is damaged or stolen, which could result in a spike in your premium rate.

Age and Marital Status

If you’re young, single and without children, you are considered part of a higher risk category than a married person with kids. Besides the fact that a young driver will have less experience on the road than an older driver, it is assumed a single adult may not be as serious about becoming a better driver than a married adult with kids, and that can cause increases in your auto insurance rate.

Commute

If you drive a lot and have a long commute to and from work or use your car for work, your premium rate can be higher because frequent driving leads to more opportunities for accidents to occur.

Many insurers use credit score to determine auto insurance rates, but at Active Insurance we work with companies that don’t use credit history so you’re eligible to receive the best rates from us, even if you don’t have the best credit score.

Car insurance is mandatory for all drivers and how much you pay is determined by several factors. It’s important to contact your insurance company with any questions regarding increased premium rates. Contact Active Insurance for more information about car insurance in Chicago. We provide a variety of options that fit the needs of Illinois drivers and would be happy to help you.

 

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What happens if I drive with an expired license?

If you get caught behind the wheel with an expired license you could face penalties including tickets, fines, vehicle impoundment and even arrest depending on the state where you live.

Each state regulates expired licenses differently. In Illinois, it can escalate from a ticketed violation to a criminal offense. According to Illinois state law, “No person shall drive a motor vehicle unless he holds a valid license or permit, or a restricted driving permit issued.” (625 ILCS 5/6-101) Active military members and their families are allowed to apply for a deferment, which gives them a limited time period to drive on an expired license. Other than that, it’s against the law for any driver to operate a vehicle with an expired license. There is a grace period of up to one year to renew an expired Illinois drivers license. If a driver fails to renew the license within a year, additional driving tests may be required as part of the renewal process.

Police Officer Approaches Female Driver

There can be serious consequences if a person drives with an expired license and is pulled over by the police. If a license is expired for less than a year, a ticket and a fine of up to $1,000 may be issued. If a driver’s license is expired for more than one year, the offense is considered a Class B misdemeanor that has a $1,500 fine with a possible jail sentence of up to six months. Under some circumstances, the police can impound a driver’s vehicle if a person is driving with an expired license and without proof of car insurance. It’s also important to note that if you are convicted of driving with an expired license, the Illinois Secretary of State will suspend your license and you must wait until the suspension period is over to apply for a new one.

Illinois drivers must renew their private passenger and motorcycle licenses:

  • 3 months after their 21st birthday
  • Every 4 years if they are 21-80 years old
  • Every 2 years if they are 81-86 years old
  • Every year if they are 87 and older

*Licenses may be renewed up to one year before a four-year or two-year license expires, or six months before a one-year license expires.

Renew your drivers license before it expires to avoid penalties and abide by Illinois driving laws. If you have any issues obtaining car insurance in Chicago because of your driving record, contact Active Insurance today.

Sources:

https://www.cyberdriveillinois.com/departments/drivers/drivers_license/drlicid.html

http://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=062500050K6-101

Car Crashes On The Rise For 2015. Why?

After years of decline in fatal car crashes, new data shows a rise in car accidents and auto-related deaths for the first half of 2015. What’s the cause?

Most experts agree the common causes for fatal auto accidents are speeding, intoxication and not wearing a seat belt. However this combination of factors can’t be the only reason for the rise. As stricter laws enforce the use of seat belts, drunk driving consequences and safer cars, fatal crashes were falling in numbers over the last several years up until this year.

According to the nonprofit National Safety Council (NSC), a combination of factors contributed to the upsurge of auto accidents for the first half of 2015: gas prices were lower than previous years, the unemployment rate decreased and unpleasant weather conditions in some parts of the country even played a role. With more drivers on the road there’s naturally a higher chance for mistakes and bad decisions to be made, which increases the occurrence of accidents. But one major contributor that continues to be analyzed is cellphones.

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Though most states ban texting while driving and require hands-free devices when behind the wheel, distracted driving (specifically with talking, texting and other uses for smartphones like watching videos) continues to be examined as a contributing factor since the NSC estimates 1 in 4 crashes involve a cellphone. Even billionaire businessman Warren Buffett found it difficult to come to any other conclusion based on the data and has said, “If cars are better–and they clearly are–drivers must be worse.” (adjusted for mileage)

The record number of car-related deaths for 2015, which is estimated to go above 40,000 for the first time since 2007, has resulted in higher premiums for drivers. Some of the largest auto insurers have raised their premiums to counter the expenses related to new accident claims. If the auto accident and auto-related death rates continue to increase, more car insurers may have to increase their premiums to offset the frequency and severity of insurance claims.

At Active Insurance, we can help you find cheap car insurance in Chicago so you will be covered in case of an accident. As an independent family-owned agency, we find cheap auto insurance rates that meet the needs of our customers. Contact us today to get a free quote, and remember when you’re behind the wheel, always practice safe driving to protect you and your fellow drivers on the road. It could save a life!

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