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 if I get into a car accident out of state?

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Getting into a car accident is rough, but getting into one out of state can feel even worse when you are in an unfamiliar territory. Reduce the potential anxiety and mistakes associated with out-of-state auto accidents by knowing the basics.

If you get into an accident out of state, what will happen depends on a case-by-case basis. However it is always beneficial to have adequate auto insurance and generally become familiar with the road laws of the state you plan on visiting before you leave home in case of a ‘what if’ scenario.

Most automobile policies cover all areas in the U.S., U.S. territories and even Canada so you shouldn’t have an issue reporting claims that occur out of state. Your insurance company will assign you to an insurance adjuster who will handle the accident.

Liability limits vary from state to state so you will be required by the state in which the accident occurred to comply with their auto insurance requirements, not the state where you live. Insurance policies may not adjust to meet a state’s minimum legal requirements. So if, for example, you have car insurance in Chicago and the state of Illinois’ liability limit is lower than the liability limit of the state where your accident occurs, the insurance company may not adjust your policy to meet the higher liability limit of the other state. What exactly happens will depend on your specific situation, but in any case it’s important to check your policy to see if it meets the requirements of the state you plan on visiting before you leave home.

If you are injured in an out-of-state accident and want compensation for the bills acquired from it, you will need to find out if you are supposed to file in your state or in the state where the accident occurred. This will depend on the laws of the state where the accident happened. As each state has their own laws regarding limitations and conditions, several factors can affect your ability to be compensated. Contact your insurance company and an attorney (depending on the severity of the accident) to better understand how you should proceed.

State-by-state minimum coverage requirements

The following table provides information on each state’s minimum coverage requirements. The first two figures refer to bodily injury liability limits, and the third figure refers to the property damage liability limit. For example, 20/40/10 means coverage up to $20,000 for each person injured in an accident, up to a maximum of $40,000 for the entire accident, and $10,000 worth of coverage for property damage. The state minimums are based on the most current information available. You should check your specific state requirements to verify these figures.

 

State Type(s) of Coverage Required Minimum Liability Limits
AL Bodily Injury and Property Damage Liability 25/50/25
AK Bodily Injury and Property Damage Liability 50/100/25
AZ Bodily Injury and Property Damage Liability 15/30/10
AR Bodily Injury and Property Damage Liability 25/50/25
CA Bodily Injury and Property Damage Liability 15/30/5
CO Bodily Injury and Property Damage Liability 25/50/15
CT Bodily Injury and Property Damage Liability, Uninsured/Underinsured Motorist 20/40/10
DE Bodily Injury and Property Damage Liability, Personal Injury Protection 15/30/10
DC Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/10
FL Property Damage Liability, Personal Injury Protection 10/20/10
GA Bodily Injury and Property Damage Liability 25/50/25
HI Bodily Injury and Property Damage Liability, Personal Injury Protection 20/40/10
ID Bodily Injury and Property Damage Liability 25/50/15
IL Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/20
IN Bodily Injury and Property Damage Liability 25/50/10
IA Bodily Injury and Property Damage Liability 20/40/15
KS Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist 25/50/10
KY Bodily Injury and Property Damage Liability, Personal Injury Protection 25/50/10
LA Bodily Injury and Property Damage Liability 15/30/25
ME Bodily Injury and Property Damage Liability, Uninsured/Underinsured Motorist 50/100/25
MD Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist 20/40/15
MA Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist 20/40/5
MI Bodily Injury and Property Damage Liability, Personal Injury Protection 20/40/10
MN Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured/Underinsured Motorist 30/60/10
MS Bodily Injury and Property Damage Liability 25/50/25
MO Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/10
MT Bodily Injury and Property Damage Liability 25/50/10
NE Bodily Injury and Property Damage Liability 25/50/25
NV Bodily Injury and Property Damage Liability 15/30/10
NH Financial Responsibility Only, Uninsured Motorist 25/50/25
NJ Bodily Injury and Property Damage Liability (Standard Limits Shown), Personal Injury Protection, Uninsured Motorist 15/30/5
NM Bodily Injury and Property Damage Liability 25/50/10
NY Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist 25/50/10
NC Bodily Injury and Property Damage Liability 30/60/25
ND Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist 25/50/25
OH Bodily Injury and Property Damage Liability 12.5/25/7.5
OK Bodily Injury and Property Damage Liability 25/50/25
OR Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist 25/50/10
PA Bodily Injury and Property Damage Liability, Personal Injury Protection 15/30/5
RI Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/25
SC Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/25
SD Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/25
TN Bodily Injury and Property Damage Liability 25/50/15
TX Bodily Injury and Property Damage Liability 25/50/25
UT Bodily Injury and Property Damage Liability, Personal Injury Protection 25/65/15
VT Bodily Injury and Property Damage Liability, Uninsured/Underinsured Motorist 25/50/10
VA Bodily Injury and Property Damage Liability, Uninsured Motorist 25/50/20
WA Bodily Injury and Property Damage Liability 25/50/10
WV Bodily Injury and Property Damage Liability, Uninsured Motorist 20/40/10
WI Financial Responsibility Only, Uninsured Motorist 50/100/15
WY Bodily Injury and Property Damage Liability 25/50/20

See more at http://www.360financialliteracy.org/Topics/Insurance/Cars-and-Auto-Insurance/State-by-State-Minimum-Coverage-Requirements#sthash.ttCThm6d.dpuf

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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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