10 Things most people don’t know about auto insurance

Auto insurance is a necessity for drivers, but many people may not fully understand all the details and nuances of their policies. Here are 10 things most people don’t know about auto insurance:

1. Credit Scores Can Affect Premiums: In many states, your credit score can influence your auto insurance premiums. Insurers believe that people with higher credit scores are less likely to file claims.

2. Comprehensive Coverage Isn’t Comprehensive: Despite its name, comprehensive coverage does not cover everything. It specifically covers non-collision-related damage, such as theft, vandalism, natural disasters, and hitting an animal.

3. Personal Belongings Are Not Covered: Items stolen from your car, such as electronics or personal belongings, are typically not covered under auto insurance. Homeowners or renters insurance usually covers these losses.

4. Car Modifications Can Increase Premiums: Adding aftermarket modifications to your vehicle, such as custom paint jobs or performance enhancements, can increase your insurance premiums due to the higher cost of repairs or replacements.

5. Mileage Affects Premiums: The more you drive, the higher the risk of accidents. Some insurers offer discounts for low-mileage drivers, so if you drive less, you might qualify for lower premiums.

6. Usage-Based Insurance: Some insurers offer usage-based insurance policies where premiums are determined by your driving behavior. Devices or apps track your driving habits, and safer driving can lead to discounts.

7. Gap Insurance: If you finance or lease a new car, standard insurance may not cover the entire amount you owe if the car is totaled. Gap insurance covers the difference between what you owe on the car and its actual cash value.

8. Rental Car Coverage: Not all policies include rental car coverage. If your car is in the shop after an accident, you might have to pay for a rental out of pocket unless you have this coverage.

9. State Minimums May Not Be Enough: The minimum liability coverage required by state law may not be sufficient to cover all damages in a serious accident. It’s often advisable to carry higher limits to better protect your assets.

10. Claims Can Affect Premiums: Even if an accident wasn’t your fault, filing a claim can sometimes lead to higher premiums. Insurers may see you as a higher risk if you’ve been involved in multiple incidents, regardless of fault.

Understanding these lesser-known aspects of auto insurance can help you make more informed decisions about your coverage, potentially saving you money and ensuring you are adequately protected.