Busting the 5 Common Myths About Auto Insurance

It can be overwhelming to shop for auto insurance, given the number of insurance agencies and the wide array of products available. From online price wars to cash incentives offered by some of the biggest auto insurance brands, it’s not uncommon for a vehicle owner to make a decision based on misinformation, rather than facts. Despite the great effort that auto insurance companies make to educate consumers about coverage information, there still seem to be a few myths circulating about car insurance that confuse people.

Let’s take a closer look at these auto insurance myths and bust them once and for all, so you can get the best vehicle coverage based on truth.

Myth #1 – Red cars, older drivers, and teens get charged more for auto insurance.

These are all common misconceptions in regards to buying auto insurance. In fact, owning a brightly colored car, being an older driver, or even a new driver does not mean you will pay a significant amount more for the same coverage other drivers get. Statistically, drivers who have safe driving records will be charged accordingly. However, if you are a grandparent teaching your teen grandson how to drive your red convertible, use the same caution you would in any other driving scenario to avoid a spike in your premiums.

Myth #2 – If I switch car insurance companies, I’ll get penalized.

Insurance companies have wised up to the concept of loyalty programs, therefore they have offered incentives for safe drivers who stick with their company. However, insured drivers may worry they will lose out on valuable discounts if they switch to another company. Truth is, the new company has discounts too and you’ll soon benefit from those. Just check first before switching.

Myth #3 – High premiums mean better coverage.

Paying more for auto insurance does not mean you will get a higher level of coverage. This is because rates can vary widely based on a variety of factors, some of which are tied to geography and the model of vehicle you drive.

Myth #4 – Auto insurance only covers damage to your car.

While most auto insurance policies make provisions for damage to other vehicles during an accident (liability insurance) they do not automatically cover damage to your car and the associated repair costs. To get your vehicle covered, you need full coverage, also known as comprehensive auto insurance.

Myth #5 – Your personal car is automatically covered if you are self-employed.

If you are self-employed and using your vehicle for work related purposes, you are not automatically covered. Consider the kind of work you do, how you use your vehicle for business purposes, and if you provide transportation to others. Then talk to your auto insurance company about getting additional business liability coverage.

Dispelling these myths and others is often simply a matter of picking up the phone to speak with a knowledgeable auto insurance agent. If you'd like to save yourself from the hassle of buying insurance, just visit the True Rate Insurance website or give us a call today at 855-735-1600 to find the best Los Angeles Car Insurance policy for you.

Should I Let my Friend Drive my Car?

If you’re wondering what exactly your auto insurance covers when it comes to other people driving your car, that’s perfectly understandable. Questions such as, “Should I let my friend drive my car?” and, “Does my insurance cover other drivers too?” are very common. By better understanding what your coverage entails, it will be easier to decide if anyone else should be allowed behind the wheel of your vehicle.

If you’ve already signed up with a plan, take the time to study the terms and conditions thoroughly and learn exactly what you’re covered for. This is particularly important when it comes to lending your car. As different plans can often differ greatly, learn everything about your auto insurance coverage and understand the definitions and rules of your policy. If you feel that this particular point has not been made clear, call your insurance company and ask for clarification. No matter what you do, don’t let anyone drive your car before you know for sure that you’re both covered.

Liability auto insurance is the type of coverage that is attached to one specific driver, no matter what car you’re driving. This way, if a person has a driving license and is covered by liability insurance, he can drive whichever vehicle he chooses and still be under the same policy. If you’re trying to decide whether you should let your friend drive your car, ask what kind of coverage he has signed up for and this will automatically tell you whether you should go ahead and allow it.

Comprehensive auto insurance is a cover plan attached to a specific car. The same goes for collision coverage as well. These two policies will cover any damage that occurs to the vehicle, but will not cover another driver that you let behind the wheel of your car.

Before allowing anyone to get onto the passenger’s seat, it is crucial that you know whether or not he or she is covered by your car insurance. Policies differ, so it is up to you, the owner of the car, to make sure that the driver is insured. For this reason, when you’re looking for the right plan of auto insurance for you, make sure you ask what happens in the case that someone else drives your car and gets involved in an accident. Ask your agent to clarify whether the plan that you’re signing up with will cover any driver or just you and you will know whether you can let a friend drive your car after a night out.

Visit the True Rate Insurance Agency website or give us a call at 855-735-1600  today for more information on how your Los Angeles car insurance policy can work with your friends.

Auto Insurance for Your Leased Car

You have leased a car, but how do you insure it? It might be easier to stick with the same insurance company that you use for the car you own, but it may not always be the most cost effective choice for your coverage. Sometimes it may be best to look at other companies and see if you can find lower rates.

Leased cars are a little different from cars you personally own. A leased vehicle still belongs to the leasing company. They want to make sure their car will be covered in the case of damaged, totaled or stolen. Usually, coverage is required to pay for the difference between what your insurance company pays and the balance on your leased vehicle at the time of the accident or damage. The insurance coverage that covers this difference is called GAP Insurance, Guaranteed Auto Protection, and covers any remaining amount between what the insurance covers and what remains on the balance of the car. If your leasing company is BMW Financial Services, Chrysler Financial or any other finance division of an automaker, then it is possible your GAP insurance will be offered by the same lease company.   

However, you have no obligation to accept the GAP insurance that is included in your lease agreement. By shopping around with different insurance companies, you may find equal coverage for a cheaper rate. Invest some time by shopping around between different insurance companies, including the insurance company you have used for cars you own.  But, always be sure that your leased vehicle is completely covered in case of an accident. The best coverage is the one that fully covers you.

If you have questions about insurance for your leased vehicle and Los Angeles car insurance, visit the website of True Rate Insurance or call us at 855-735-1600. When you are looking for something as vital as insurance, you want a company like True Rate that you can count on to help you build the right plan at the best possible price.

Car Insurance in Los Angeles

What is exactly is car insurance?

Automobile insurance is simply a contract that helps pay for certain types of financial losses or obligations resulting from the use or ownership of an automobile. To obtain this contract (insurance policy), you pay a specified amount of money called a premium. In return for the premium paid, the insurance company agrees to pay certain expenses and legal liabilities depending on the terms of the insurance policy. Having the right insurance coverage may prevent you from suffering a large financial loss in the event of an automobile accident.

The responsibilities of owning and driving an automobile include following the financial responsibility laws under the Vehicle Code. The most common way to satisfy the financial responsibility for operating an automobile in California is by purchasing automobile liability insurance.

If you choose to meet your financial responsibility by purchasing liability insurance, the DMV outlines minimum limits that you must purchase under Section 16451 of the Vehicle Code.

Financial Responsibility Laws

The statutory minimum limits of liability insurance in California* are as follows:

Bodily Injury Liability

• $15,000 for death or injury of any one person, any one accident.
• $30,000 for all persons in any one accident.

Property Damage Liability

• $5,000 for any one accident.

There are four ways to accomplish financial responsibility:

1. Coverage by a motor vehicle or automobile liability insurance policy;
2. A cash deposit of $35,000 with the DMV;
3. A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or
4. A surety bond for $35,000 obtained from an insurance company licensed to do business in California.

All California drivers and owners must have at least the statutory limits of minimum liability insurance or an approved alternative way to pay for injury or property damage they may cause.* Penalties are very severe for non-compliance with this section of the vehicle code.

When your car is in an accident for which you are found legally liable, bodily injury (BI) liability covers your liability to others for injuries to them. Property damage (PD) liability covers your liability for damage to someone else's property.

A policy with BI of $15,000/$30,000 and PD of $5,000 will pay out as follows:

• The maximum limit for one person's injuries, medical expenses, etc. is $15,000 under the bodily injury portion;
• If two or more people are injured, the maximum limit for the accident will be $30,000;
• The maximum limit for damage to other people's property (their car, their fence, etc.) is $5,000.

Comprehensive coverage (other than collision), uninsured motorist, medical payments and collision insurance are not required by law.

(Source)
*See California Low Cost Automobile Insurance exception.

Los Angeles

Los Angeles was founded on September 4, 1781, by Spanish governor Felipe de Neve. It became a part of Mexico in 1821 following the Mexican War of Independence. In 1848, at the end of the Mexican–American War, Los Angeles and the rest of California were purchased as part of the Treaty of Guadalupe Hidalgo, thereby becoming part of the United States. Los Angeles was incorporated as a municipality on April 4, 1850, five months before California achieved statehood.


Nicknamed the City of Angels, Los Angeles is a leading world center of business, international trade, entertainment, culture, media, fashion, science, sports, technology, and education, and has been ranked the third richest city and fifth most powerful and influential city in the world. The city is home to renowned institutions covering a broad range of professional and cultural fields and is one of the most substantial economic engines within the United States. The Los Angeles combined statistical area (CSA) has a gross metropolitan product (GMP) of $831 billion (as of 2008), making it the third largest economic center in the world, after the Greater Tokyo and New York metropolitan areas. As the home base of Hollywood, it is also known as the "Entertainment Capital of the World," leading the world in the creation of television productions, video games, and recorded music; it is also one of the leaders in motion picture production. The importance of the entertainment business to the city has led many celebrities to call Los Angeles and its surrounding suburbs home. Additionally, Los Angeles hosted the Summer Olympic Games in 1932 and 1984. (Source)

At True Rate Insurance, we welcome your calls and questions at anytime – whether you are one of our customers, a prospective buyer or someone covered by another insurance company all together. Unlike some companies, we at True Rate Insurance will sit down and go over your questions on an individual basis – no strings attached. For honest, customized and stress-free Los Angeles car insurance advice, contact me, Engy Ramadan, at True Rate Insurance today. Simply call 323-735-1600.