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Does My Red Car Make My Insurance Premium Higher?

Growing up in an insurance family did not necessarily increase my knowledge of insurance.  In fact, in many ways, I guess it hampered it.  With so many knowledgeable people around to give me advice, I just left all the thinking up to them.  So, when asked by a friend who is purchasing a car for her son’s graduation, “Does the color of your car affect your car insurance rates?” I had to say, “I’m not sure…but I’ll find out.”

I took that question, along with a few others, to the newest member at YMI (next to me!), Joe Saeger.  A graduate of Notre Dame High School in East Stroudsburg, Joe has incredible initiative.  Back in February/March 2009, he contacted Jim about a job listing we had posted on our website.  Thanking Joe for his inquiry, Jim explained he really needed a licensed person.  A few short months later, in August/September 2009, Joe contacted Jim with the news he had studied, tested, and passed his license exam.  Jim then met with Joe, and offered him the job.  Joe is licensed for life, health, and annuities in the state of Pennsylvania, as well as for property and causality in both Pennsylvania and New Jersey.  Here are his answers in response to my questions about auto insurance:

1.       Do I need car insurance if I’ve never been in an accident?

Absolutely!  Insurance provides protection for when we need it most – and none of us know when that time may be.  Although you may be a safe driver, which is great, you still need to have car insurance as it is required by law and the smart thing to do.  Plus, having no accidents and being a safe driver will increase your eligibility for discounts and better rates.

2.        Are auto insurance premiums affected by the color of the vehicle?

The color of your vehicle does not affect the insurance premium; however, the performance of the vehicle may.

3.       If a friend crashes my car whose auto insurance covers it?

  Your auto insurance will follow your vehicle; however, any applicable “first-party benefits” will be covered by your friend’s own insurance.  So, in general, “When you lend your car, you lend your insurance.”

 4.       Does the government set insurance premiums? 

 How insurance rates are set depends on what state you live in, as they are regulated on a state-to-state basis and the insurer has to follow these regulations.  The cost of insurance is also determined by known factors such as age, driving history, type of vehicle, etc.

5.       Are state limits adequate?       

State limits are the required “minimum” and, just as implied, provide the lowest coverage to stay legal.  It is always recommended to carry the highest limits that will fit into your budget.  None of us know the severity of an accident that may occur, so to carry higher limits will give you a greater chance of protecting yourself in that worst-case scenario.

 6.       What is the difference between comprehensive and collision?

Comprehensive, also commonly referred to as “other than collision,” provides physical damage protection to your vehicle (less the deductible specified) that is not caused by collision or upset.  Most common claims are fire, theft, vandalism, deer, etc.

Collision provides physical damage protection to your vehicle (less the deductible specified) from a loss that is caused by collision or upset.  Common claims are impacting another vehicle or object, etc.

7.       Does my driving record affect my insurance premium?

Yes, it sure does.  Accidents and violations will have a negative impact on your insurance premium – all the more reason to be a safe driver.

 8.       My son just got his permit.  Does he need insurance?

Your son will need to be added to your policy or to have his own policy when he obtains his actual license.  It is strongly advised to inform your agent when he is permitted so we can follow up with you when he is expected to be licensed, as well as help you with any additional questions along the way.

 9.       How can I get discounts on my insurance?

 Most of our carriers provide a multi-policy discount which is normally the most generous of the discounts that are available.  This is a quick and easy way for us to save you money on the policy you currently have with us, as well as the product you give us the opportunity to quote and insure.  Plus, having all of your insurance in one place allows us to have a better relationship with you and to make sure you are taken care of properly.  Other discounts include safe driver, Accident Prevention Course, Driver Training, etc…all subject to eligibility.

 Thanks, Joe, for taking the time to answer these important auto insurance questions!  Jim always says Joe has been a great addition to our team…I think everyone at YMI would agree!