Car Insurance Price Fact or Fiction Quiz

The Internet is steeped in false information about car insurance, particularly regarding what does and does not affect premiums. Perhaps you think you know the factors that determine car insurance prices. If so, put your knowledge to the test by taking the following car insurance price quiz. The real answers might surprise you.

Fact or Fiction: The Color of Your Car Affects Insurance Rates

Fiction. The color of your vehicle has nothing to do with the car insurance prices you will pay, but this remains one of the most commonly perpetuated myths about auto insurance. You will not pay a higher price on car insurance for bolder colors, despite what you may have heard. The only vehicle-related factors that will influence your car insurance price are the year, make, model, engine size, and body type. Any other variables are irrelevant to your car insurance premiums.

Fact or Fiction: A Late Credit Card Payment Might Raise Your Premiums

Fact. The overwhelming majority of car insurance carriers look at your credit record in setting your car insurance price. How good (or bad) your credit report is will directly influence how high your premiums are. For example, if you have late payments on your credit report, they may end up raising your car insurance prices down the road. You might be able to find an insurer that does not consider your credit record when issuing coverage, but such carriers are rare.

Fact or Fiction: Men Pay Higher Car Insurance Prices

Fiction and fact—it all depends on the age group in question. Men under the age of 25 have accidents at much higher rates than women in the same age bracket, so they do actually pay higher auto insurance prices. However, after age 25, the gender auto insurance price disparity goes away. Adult men and women pay the same rates for auto insurance. You can find more information on this common misconception by reading another article which covers the subject of cheap female car insurance in greater depth.

Fact or Fiction: The Government Sets Your Car Insurance Price

Fiction. The government has nothing to do with the setting of car insurance prices. Insurers determine the auto insurance price you will pay by examining claims statistics for people of similar backgrounds. The only role the government has in car insurance is at the state level, where lawmakers can set mandatory liability insurance minimums that residents must carry to drive legally.

Fact or Fiction: An Accident That Occurred While Someone Else Was Driving My Car Won’t Affect My Premiums

Fiction. Your car insurance follows your vehicle, so if you gave someone permission to drive it and an accident occurred, you are still responsible. What’s more, the claim will go on your record and may raise your car insurance price for three to five years.