Most drivers think they understand auto insurance, but these 10 facts about car insurance reveal how little many people know about their policies. Whether you’re shopping for new coverage or trying to understand your current plan, these eye-opening insights will help you make smarter decisions and potentially save hundreds per year.
1. Your Credit Score Impacts Your Rates More Than Your Driving Record
One of the most surprising facts about car insurance is that in most states (except CA, HI, and MA), insurers consider credit history when calculating premiums:
- Drivers with poor credit pay 72% more on average than those with excellent credit
- A single 100-point credit score increase can lower premiums by 15-20%
- Insurers use “credit-based insurance scores” that differ slightly from FICO scores
2. Red Cars Don’t Cost More to Insure
Despite the persistent myth, this fact about car insurance might surprise you:
| What Actually Affects Rates | What Doesn’t Matter |
|---|---|
| Vehicle make/model | Color |
| Engine size | Custom paint jobs (unless extremely valuable) |
| Repair costs | Decals/stickers |
3. You Could Be Paying for Coverage You Don’t Need
Many drivers unknowingly waste money on:
- Rental car coverage when they own multiple vehicles
- Roadside assistance already included with new car warranties
- Gap insurance after loan balance drops below car value
4. Your Occupation Affects Your Premium
Insurers have found correlations between professions and claim likelihood:
| Lower-Risk Occupations | Higher-Risk Occupations |
|---|---|
| Scientists (10% below average) | Delivery drivers (22% above) |
| Teachers (7% below) | Sales reps (18% above) |
| Accountants (5% below) | Artists (15% above) |
5. Most States Require Insurance, But New Hampshire Doesn’t
Among the most surprising facts about car insurance is that:
- 49 states mandate minimum liability coverage
- New Hampshire only requires proof of financial responsibility
- Virginia allows drivers to pay $500 uninsured motorist fee instead of buying coverage
6. Comprehensive Coverage Isn’t What You Think
Despite its name, “comprehensive” doesn’t mean complete protection:
- Does cover: Theft, vandalism, weather, animal collisions
- Doesn’t cover: Mechanical failures, normal wear and tear
- Average cost: $150-$400/year depending on deductible
7. Your Rates Can Increase After a Not-At-Fault Accident
One of the most frustrating facts about car insurance is that even when you’re not to blame:
- Drivers who file not-at-fault claims see 12% average premium increases
- Insurers view claim filers as higher risk overall
- Multiple not-at-fault claims can lead to non-renewal
8. Insurance Follows the Car, Not the Driver
This crucial fact about car insurance affects loaner cars and rentals:
- Your policy typically covers occasional drivers of your vehicle
- Rental cars are covered if you carry collision/comprehensive
- Exclusions apply for commercial use or intentional damage
9. You Can Be Denied for Too Many Quotes
Few know this alarming fact about car insurance:
- Each quote generates a “hard inquiry” on your credit report
- Too many inquiries in short periods can trigger rejections
- Solution: Get quotes within 14-day window (counts as one inquiry)
10. Pets Are Often Covered in Accidents
The most heartwarming of our 10 facts about car insurance:
- Most policies include $500-$2,000 for vet bills after accidents
- Coverage applies to pets in your vehicle during collisions
- Some insurers offer pet injury endorsements for higher limits
How to Use These Facts to Save Money
- Check your credit report – Fix errors that may be costing you
- Review coverage annually – Eliminate unnecessary add-ons
- Ask about occupation discounts – Many insurers offer them
- Bundle policies – Combine home/auto for 15-25% savings
- Shop smart – Get all quotes within a 2-week period
Frequently Asked Questions
Which fact surprises people most?
Credit score impact: Most assume driving record matters most.
Do insurance companies share claim history?
Yes: Through CLUE reports that track 7 years of claims.
Can I remove comprehensive coverage anytime?
Yes: Unless your lender requires it for financed vehicles.
Why do quotes vary so much between companies?
Each insurer uses proprietary algorithms weighing factors differently.
How often should I review my policy?
Annually: And after major life changes (marriage, move, etc.).
Ready to Put These Insurance Facts to Work?
AutoGuard Protect helps drivers use insider knowledge to get better coverage at lower rates.
Call our experts at +1 (800) 443-1435 to discuss your options
