Myth Busters; Red Cars and High Insurance Premiums

There are a lot of myths about insurance and specifically auto insurance. These myths have become something of legends and in a lot of cases makes people wary about insurance.

One of the biggest myth insurance professionals have spent years trying to dispel is the one on the color of your car affects how much premium you pay. This myth says that if you own a red car your insurance premium is pricier than say if you owned a white car. We do not know why this is a thing. According to a study done by insuranceguote.com, “almost half (44 percent) of respondents mistakenly think driving a bright red car increases or decreases the cost of auto insurance. The study also showed that this myth is held among drivers between the ages of 18 to 29. This figure doesn’t come as a surprise as most Americans are not very financially literate and since most insurance shoppers do not take time to learn about their policies and insurance terms some of these myths keep gaining ground.

The fact, however, is that the color of your car does not affect your insurance premium. What insurance writers take into consideration when writing your policy however includes the kind of car you have (for instance,  a high-end import car is likely to cost more to insure than a standard American vehicle), your claim and accident history, the age of the car and the driver’s history.

Now that is a myth buster for you!

Understanding Full Coverage and Liability Coverage in Auto Insurance

Mike Johnson
Mike Johnson, Insurance Broker at EIG

With auto insurance, it is easy to ignore the nuance involved and go for the required minimum per State when it comes to auto insurance. But spending the minimum could come at a cost because the different insurance packages have different coverage and limits spelled out in the terms. We should pay attention to these terms before making an important decision. Our producer, Mike Johnson, breaks down what the coverage and limits of the term are and how auto insurance shoppers can make informed decisions when picking a policy.

Mike starts his conversations with a client or potential client by trying to understand the policy which would best suit them; be it full coverage or liability coverage, he goes ahead to explain the differences. “Often, the clients are unaware of the differences with the coverage types, and so I simplify the language to help them make the right choice.”

As stated earlier, there are two types of Auto Insurance; full coverage and liability coverage. Each type comes with different tiers and premiums.  

“Full coverage” is when you get the mandatory liability coverage which pays for the damage you inflict on other people and property plus comprehensive and collision. Comprehensive cover takes care of damages to your car caused by events that are out of your control. It covers things like theft, vandalism, glass and windshield damage, fire, weather/acts of nature. Collision, on the other hand, helps pay to repair or replace your car if it’s damaged in an accident with another vehicle or object, such as a fence, tree or animal. Ideally, full coverage means you have insurance in the types and amounts that are appropriate for your income, assets and risk profile. The point of all types of car insurance is to keep you from being financially setback by an accident or incident. Making the right choice may be one of the most crucial decisions you would make in your life.

To explain further, Mike added that “full coverage pays for the damage you do to others, up to your liability limit. It also pays for your car, up to its fair market value, minus your deductible in case of a total loss, if you are at fault or if the car is destroyed by a natural disaster or is stolen.”

Full coverage also pays for your injuries as well as your passengers’ injuries, if you are at fault, up to the amount of your bodily injury limits. It also covers these injured people if you are hit by an uninsured motorist, up to the limits of your uninsured motorist coverage.

Liability coverage, on the other hand, is meant to protect you from having to pay huge amounts to people in case you are sued for an accident which was your fault. According to Mike, your policy and coverage depends on the value of your assets, or what your combined savings and property are worth.

 Liability covers bodily injury liability protection and helps to pay for the medical expenses of the other party if you are found at fault in the accident. In some circumstances, it may even cover lost wages and/or legal fees if the injured party files a lawsuit depending on the policy limits.

It also pays for damages to property resulting from a covered accident in which you’re at fault. It covers the other party’s vehicle repair or replacement costs, as well as other property that may have been damaged in the accident, such as fences, structures, phone poles and other types of property.

“Liability insurance is highly dependent on your financial situation and the property being insured, so be wary of generic liability coverage recommendations you might see. The more you own, the more liability insurance you should have.”

For Mike, it is not just about selling policies, it is about making sure the client is getting the best value that fits their specific needs. “Every client is unique, some of them know what they want. Others don’t, and it is up to me to assess their needs and recommend the best policy for them. For us at Everett Insurance Group, the needs of our customers come first!”

Getting the Right Type of Auto Insurance Policy in Las Vegas, NV

Getting the right type of auto insurance policy is important. If you live in the Las Vegas, NV area, then Everett Insurance Group can help provide you with all the necessary coverage options, tools, and resources you need to stay protected. Remember that transportation is an investment, and so is your health and welfare. Getting the right coverage for property, liability, and medical issues are one of the most important reasons that auto insurance exists. Make sure you have the right plan in place in case of an accident or other problem. 

Liability Coverage

Liability coverage is the minimum type of coverage usually required in most states to drive on public roadways legally. It helps protect you and other drivers from costs associated with medical care, property damage, and other costs. It provides minimal coverage as opposed to full coverage. There are usually several ways to shop for liability insurance with different levels of coverage. Talk to an agent to learn more about what options for coverage are available. 

Full Coverage 

Full coverage is the preferred method of insurance. Often, dealerships and lenders will require you to purchase full coverage insurance when buying or leasing a new car. This is how they protect themselves from the liability from lending money to someone who may crash the car or run into financial trouble from an incident involving their car. They want to see to it that there is some insurance so the vehicle owner can continue to make payments on the loan or lease. Additionally, full coverage protects you with more coverage and more options for vehicle replacement, hospital costs out of pocket and more. Full coverage might also cover more types of incidents than the liability, but each policy is different, and you should consult with an agent on the specifics of your policy. 

Contact the offices of Everett Insurance Group in Las Vegas, NV to speak with an agent about getting an auto insurance policy and a quote.