The auto insurance policy and coverage amount you carry as a motorist can significantly impact your finances. That’s why it’s so important to be informed appropriately.
At AFI Insurance, we know how important it is for motorists to be aware of common misconceptions about auto insurance. The following are four common misconceptions to be mindful of regarding auto insurance.
Auto insurance premiums always go up after you file a claim.
When you have auto insurance, it’s essential to use it when necessary. Don’t be afraid to file a claim because you think your premiums will go up. Your premiums shouldn’t go significantly up just because you file one claim or get one ticket on your driving record.
You can use your general auto insurance policy to cover the commercial use of your vehicle.
You may need to invest in commercial auto coverage if you use your vehicle for commercial purposes. General auto insurance does not typically cover vehicles used for commercial purposes.
Collision coverage pays off your car loan in case of a total loss.
If you have a loan out on your vehicle, you’ll be required to carry collision coverage by your lender. However, that doesn’t necessarily mean that your insurance will ultimately pay off your loan if your vehicle is destroyed in an accident.
Collision coverage will only compensate you for the current market value of your vehicle at the time of your accident. You may need to pay off your loan out of pocket if you owe more on your car than its current market value.
You only need to meet state minimum requirements with your insurance coverage.
It’s best to exceed state minimum requirements for coverage to enjoy enough liability coverage to protect you financially. While state minimum coverage is all you are legally required to have, it’s best to be cautious and invest in added coverage.
Let us help you explore your auto insurance options in Denver, CO at AFI Insurance. We can provide you with helpful information and policy quotes to find the coverage you need.