Insurance can be a car owner’s largest and most complex long-term ownership cost. There are a lot of misconceptions out there, so we contacted industry experts for answers to some of the most common – and most misunderstood – car insurance questions.
• Does my driving record affect what I’ll pay for car insurance?
According to Ron Kinn, president of the Skyline Insurance Agency in Chicago, Ill., it affects more than just an owner’s insurance rates. “An insurance company will typically look at a driver’s record over the last five years and increase the premium due to accidents, moving violations and license suspensions,” he explains. “This data could also cause the person to be denied coverage or even be dropped by an insurance company.”
• Will my insurance rates go up if I am ticketed for driving while texting?
While insurance companies aren’t yet hiking premiums because of texting citations, according to Don Griffin, vice-president of personal lines for the Property Casualty Insurers Association of America, distracted drivers could nevertheless find their rates on the rise under certain circumstances. “If a ticket is issued in conjunction with an at-fault accident, then there could be an increase in premiums if texting caused the accident,” he says.
• Is there that much of a difference in insurance rates between those living in a big city as opposed to the suburbs or a rural area?
According to Kinn, where a person lives is a major determining factor in how much he or she will pay for car insurance. “The congested city traffic, narrow streets, and high volume of pedestrians and bicycle riders create a higher frequency of auto accidents and bodily injury compared to the suburbs,” he says, which necessitates higher premiums to cover the increased risk involved in covering urban drivers.
• Am I covered if my car is damaged in a flood?
Unlike owning a home, you don’t need to take out specific flood insurance on your car, so long as you have comprehensive and collision coverage. “If you drive into a flooded roadway, that would fall under your collision coverage, while if your vehicle were parked and became flooded it would be covered by your comprehensive coverage,” says Kinn.
• Do men automatically pay more for car insurance because they tend to drive more recklessly than women?
According to Griffin, the largest difference in premiums among drivers of opposite sexes is among younger – and thus, less experienced – drivers. “Young men can be more than twice as likely to have an accident as young women of the same age.”
• Does it cost more to insure a luxury-branded car instead of a comparably priced non-luxury model?
Yes, luxury-brand models will usually cost more to insure. “The overall replacement value tends to be greater, and the repair costs are usually more expensive, plus luxury models usually have a greater risk of theft – not just for the vehicle itself, but also for the parts,” Kinn says. “Also, many luxury models are rated as performance vehicles, which likewise results in higher premiums.”
• Will a past DUI (driving under the influence citation) affect my car insurance rates even if my record is now clean?
Griffin says that depending on the state, a DUI will tarnish a driver’s record for at least 7 to 10 years, but will typically affect a driver’s insurance status only as long as it’s active. “Once the record becomes ‘clean,’ insurers in some states cannot use a past DUI to charge higher rates.”