In an age of information overload, it can be hard to know who to trust for facts and knowledge when it comes to running your business. That is certainly the case with auto insurance. Knowing common auto insurance myths for your business in 2022 helps you start sifting through all the noise so you can get actual facts you can actually use.
Common Auto Insurance Myths
There are many misconceptions about auto insurance, but Ally lists five of the most egregious ones floating around out there. One fact is indisputable, and that is how auto insurance is a must-have for all drivers, especially when it comes to trusting your brand with your employees and drivers.
Past that, what actual facts can you count on? Some things might sound like common knowledge or things you hear from colleagues and coworkers. Then again, much of it might still be false or misrepresented. Check what you think you have learned against the following list for the accuracy of what your mind has been fed:
1. Women Get Cheaper Auto Insurance
This one is complicated. Auto insurance rates are determined by many factors, including but not limited to vehicle type, credit score, driving record, age, and where you work and live. Gender is actually a deciding factor, too, but it is not consistent. Insurance companies do charge men higher rates than women, but they do so based on statistics rather than discrimination. Men simply have higher risks of both speeding and accidents based on documented hard numbers. Women in the age range of 16 years of age up to 24 years old typically pay almost $45 less per month for their insurance than men their same age do. The good news for men is that the gap narrows as drivers get later into life.
2. You Can Get Canceled After Having An Accident
If you wind up having a car accident on company time, you might be worried about having your coverage canceled. It is technically true that your insurer has the power to cancel your policy anytime they want. However, accidents aren't typically the reason this happens. What they will cancel you over is if they find out you lied on your application or on a claim. They can also cancel you for nonpayment of premiums. Other potential cancellation reasons include revoked or suspended employee licenses and any new medical conditions impacting your employees capacity to drive. Accidents will impact your premiums, but your rates are unlikely to go up until you renew your policy. Some insurance providers even have accident forgiveness.
3. Minimum Insurance Coverage Is Okay
The majority of states have legal mandates about the minimum auto insurance coverage you are allowed to have for your company fleet. Some drivers think that just meeting this is enough. The truth is that going with the minimum can cost you a lot more in the long run. Many states require minimums of $50,000 for bodily injury and $25,000 for property damage liability. That might sound like a lot, but many cars can be worth far more than $25,000, especially if there are multiple vehicles involved in an accident or a DUI was involved. Medical bills can certainly exceed $50,000 if one person gets injured badly or there are multiple people who get hurt. Factor in the risks of underinsured or uninsured drivers, and you can see that insufficient insurance coverage will leave you financially devastated pretty quickly.
4. Someone Else Driving Your Company Car Is Covered By Their Own Insurance
If you let someone else drive your vehicle and they wind up in an accident, then their auto insurance handles the damage to your company ride, right? Think twice about this. Auto insurance usually is associated with the vehicle instead of the driver. You are probably going to be the one responsible for that deductible just by being the vehicle owner, even if you weren't the driver. Having said that, bodily injury claims past your own policy coverage will possibly hit your friend's policy coverage.
5. Red Vehicles Are More Expensive To Insure
Many people tend to think of red vehicles as sports cars. Such vehicles are assumed to be fast and flashy. This misconception might stem from the urban legend that red cars get pulled over by law enforcement the most. In actuality, it is often white cars pulled over more than any other color (probably since there are so many white cars on the road compared to flashier colors), but your insurance won't even care about you having a white car. Every color vehicle is charged the same amount of insurance.
Fast Facts About Auto Insurance
If you need auto insurance in Arizona or other major US states, then there are some specific facts local to the state that you should know. There are various discounts available, depending on where you live. For example, did you know that you will have more insurance choices in urban areas than if you operate out of a rural community?
It’s worth noting that you have various options for how you pay your insurance premium. You can pay an annual lump sum that covers your fleet for a year, or you can split your premiums up into monthly payments for more financial flexibility.
Know what your needs are. The kind of driving your company does, the vehicles you have, and how much you use them can make your actual coverage needs higher or lower.
Feel free to consult a professional about your insurance needs. Make sure you inquire about all their discounts and coverage details. Don’t simply settle for the first plan you are offered. It is easy to collect automated quotes online, but sometimes your best move is to talk to an insurance agent or representative so you can ask questions and get answers that help you navigate all of this.
Three Things That Are True About Auto Insurance
Having busted some common myths about auto insurance in 2022, there are a few things that are actually true:
I. Your Credit Score Matters
Insurers assume that drivers who are more responsible with their money will also be more responsible drivers. That means that having a higher credit score usually results in lower car insurance premiums.
II. Remote Work Can Save You Money
If you have shifted a majority of your employees to working from home, you can save money. Not only are you using less gas or electricity, depending on what kind of vehicles you have, but you can also save on your auto insurance for driving fewer miles. If you can transition a portion of your team away from needing to use your company vehicles, you can reduce your fleet size and cut out some major costs of operation.
III. The Internet Made Things Cheaper
Half of all car insurance premiums are spent on administrative costs rather than claims. The rise of online quotes and shopping in the middle of the 1990s actually reduced operational costs for many insurers as a result.
Don't Struggle With Car Insurance
When shopping for auto insurance for your company, many business owners get caught up in a struggle between meeting legal minimums, having enough coverage for their fleet, and keeping costs down to save money. Remember that these three goals are not actually in conflict. The goal in every case is to protect your business financially which means paying close attention to all aspects of your company's vehicle insurance needs.
