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10 Things You May Not Know About Your Car Insurance

1. If your friend drives your car and wrecks it, your insurance pays the damages.

This is because the insurance follows the car, not the driver.

2. Everyone in your house that is of driving age, whether they have insurance or not, is rated on your policy.

From the insurance company’s perspective, if they live in the house, then there’s a chance they will drive the car and because the insurance follows the car and not the driver, if someone in the house drives your car and gets into an accident, your insurance has to pay for those damages. There is a way around this though, if there’s absolutely no reason why someone in your house would ever drive your car, you can get that person excluded from your policy. However, this means, if they drive your car while being excluded from the policy and get into an accident, the insurance company won’t pay anything because they’re not covered.

3. If you are using a different address on your policy for cheaper rates and get into an accident, the insurance company can deny your claim and/or cancel your policy.

After you file a claim, the insurance company will investigate it. If they find out that you have been using a different address, they can deny your claim, flag your account as fraudulent and/or cancel your insurance policy.

4. There ARE ways to lower the price:

  • Multi Policy Discount: Discount for having more than one policy with the same company.

  • Low Mileage Discount: Discount for having a vehicle with low annual mileage. This is typically applied to retirees, people with more than one vehicle or anyone else who does not exceed driving about 5,000 miles/year.

  • Good Student Discount: Discount given to young drivers who receive good grades in school. Typically, it is required that the student earns grades that are B and above.

  • Student Away From Home Discount: Discount for having a student driver that is on the policy, but away from home due to school.

  • Higher Deductible means Lower Policy Cost: Taking on a higher deductible means that you are agreeing to take on more risk. Because of this, when you have a higher deductible or increase your deductible, your insurance policy’s price will go down.

5. The color of your car does not increase the price.


“You have a red car on your policy so your insurance costs more” is just a myth. In fact, when we (insurance agents) quote you for auto insurance, we don’t even ask what color your vehicles are.

6. You and your neighbor, whether you drive the same car or not, do not pay the same amount in insurance.

This is because, some of the factors that determine your rate are:

  • Year, Make & Model of the car

  • Age

  • Number of years driving

  • Driving record

  • Credit score

  • How frequent you drive the car

  • Where you live (ex: city, where there’s a lot of traffic activity versus rural town, where there’s low traffic activity)

7. The cost of your auto insurance will typically go up every year even though you had no accidents.

It may seem like nothing has changed, but in actuality, there are a number of things that do change every year that sometimes will affect your rate.

These include, but are not limited to:

  • The cost of parts increase annually

  • The crime rate or number of accidents in your area may have increased

  • Credit score can be a factor

  • The amount of thefts of your particular vehicle may have increased

  • If you cancelled another policy with the same company, you may have lost a “multi-policy” discount

8. When you turn 25, your insurance cost will not decrease immediately.

When your policy renews, your insurance company assesses things like age, accidents, moving violations, etc. that have occurred since your last renewal and adjusts the price as necessary then.

9. There are certain changes that will increase your policy before renewal

For example:

  • If you move (a new zip code will be rated differently)

  • If your teenager gets their drivers license, so you have to add them to the policy

  • If you add a new vehicle to your policy

  • If you increase the amount of miles you drive annually

  • If you increase your policy limits or add new coverages (More coverage is always recommended)

  • If you decrease your deductible

10. Avoid a lapse in coverage at ALL costs! It will follow you to your next insurance company.

Having a policy cancelled for non-payment results in a lapse in coverage. The lapse is documented and will follow you to the next insurance company who might charge you more or even refuse to write the policy altogether. In Maryland, it is state mandated that you carry insurance on all owned vehicles, so if you lapse in Maryland, you will have to get insurance again and it could result in a very expensive policy.

One More Thing...

Agents are there to HELP you – You pay nothing extra for their assistance.

All insurance agents in Maryland are licensed by the state and held accountable by the Insurance Commission to ensure that they are operating as trusted advisers to you. Most agencies (like ours), build relationships with their clients and are there to assess what your risk exposures are, make sure that you are covered for them and educate you on why they recommend what they do and how it benefits and protects you.

If you have to file a claim, make a change to your policy or ask a question about insurance, you don’t want to have to call a 1-800 number and get a different person to help you every time. It’s much easier to call Diana, Veronica, Jada or Robin at 410-766-6655 and have the same person who knows you and is familiar with your account and your needs, assist you.

Are you getting all of the discounts that you're entitled to? Contact us for a no-obligation policy review. We will review your insurance policies (for you and/or your business) to make sure that you have the right coverage for your needs and are getting the discounts you deserve. You'll either have the best or we'll give you the best. It's a win-win!

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