Common Myths About Auto Insurance—Debunked

Common Myths About Auto Insurance—Debunked

When it comes to auto insurance, misconceptions abound, leaving many drivers confused about what their policies actually cover. Believing these myths can cost you money or leave you unprotected when you need it most. Dive into the truth behind some of the most common auto insurance myths and make more informed decisions.

Myth #1: Red Cars Cost More to Insure

This long-standing myth likely stems from the perception that red cars are flashy and driven more aggressively. However, insurance companies don’t base premiums on the color of your car. Instead, they consider factors like:

  • Make, model, and year of the vehicle
  • Safety features
  • Repair costs
  • Theft rates

If you love red, go ahead and buy that crimson car—it won’t cost you extra to insure it.

Myth #2: Your Insurance Covers Any Driver of Your Car

Many people assume their car insurance will automatically cover anyone who drives their vehicle, but this isn’t always the case. Most policies only cover drivers explicitly listed on your policy or those driving with your permission in specific circumstances. If an unlisted driver causes an accident, you could be held financially responsible.

Myth #3: Minimum Coverage Is Enough for Everyone

Carrying only the state-required minimum liability coverage might seem like a way to save money, but it often leaves you underinsured. Minimum coverage only pays for damages to other people and their property—not your own expenses. If you’re at fault in a serious accident, the costs could far exceed your coverage limits, leaving you with hefty out-of-pocket bills.

Myth #4: Your Personal Belongings Are Covered

While auto insurance covers your car, it doesn’t typically cover personal belongings inside the vehicle. For example, if your laptop or phone is stolen from your car, you’ll need to file a claim with your homeowners or renters insurance—not your auto policy. Make sure to double-check your coverage and take steps to protect valuables.

Myth #5: Older Drivers Always Pay More for Insurance

It’s true that young, inexperienced drivers tend to have higher premiums, but older drivers aren’t automatically penalized. In fact, many insurers offer discounts to drivers over 50 who maintain a good driving record. However, premiums may rise again after age 70 due to increased accident risks associated with aging.

Myth #6: Your Credit Score Doesn’t Affect Your Rates

As surprising as it may seem, your credit score can significantly impact your auto insurance premiums in most states. Insurers view drivers with good credit as less risky, leading to lower rates. Improving your credit score can help you save on insurance over time.

Myth #7: Filing a Claim Will Always Increase Your Rates

Filing a claim doesn’t always mean your premiums will skyrocket. Insurers consider factors like who was at fault, the severity of the claim, and your overall driving record. For minor claims or situations where you’re not at fault, your rates may stay the same.

Myth #8: Comprehensive and Collision Coverage Protect Against Everything

While these coverages provide valuable protection, they don’t cover every possible scenario. For example:

  • Collision Coverage: Pays for damage to your car in an accident, regardless of fault.
  • Comprehensive Coverage: Covers non-collision events like theft, vandalism, or weather damage.

Neither covers liability, medical expenses, or routine wear and tear. To fill these gaps, you’ll need additional coverages like liability, personal injury protection, or uninsured motorist coverage.

Myth #9: Small Cars Are Cheaper to Insure

You might think smaller cars come with smaller insurance bills, but that’s not always true. Insurance costs depend more on repair expenses, safety ratings, and theft rates than on size. Some small cars, especially sporty models, can cost more to insure than larger, safer vehicles.

Myth #10: Insurance Follows the Driver, Not the Car

In most cases, auto insurance follows the car, not the driver. This means if someone borrows your car and causes an accident, your insurance is typically the primary coverage used. The borrower’s insurance may serve as secondary coverage, but it’s essential to understand how this works to avoid surprises.

Myth #11: Full Coverage Means You’re Fully Protected

The term “full coverage” is misleading. It usually refers to having a combination of liability, comprehensive, and collision coverage, but it doesn’t mean you’re covered for everything. Full coverage won’t pay for mechanical breakdowns, uninsured motorists, or expenses beyond your policy limits.

How to Avoid Falling for Myths

To make sure you’re getting the right coverage, follow these tips:

  • Read Your Policy: Take the time to understand what your insurance covers—and what it doesn’t.
  • Ask Questions: If you’re unsure about coverage, reach out to your insurer or agent for clarification.
  • Stay Informed: Keep up with changes in insurance laws and industry practices that may affect your policy.

Parting Advice

Believing myths about auto insurance can leave you unprepared or paying more than you need to. By understanding the truth behind these misconceptions, you’ll be better equipped to choose coverage that truly meets your needs. Look into your policy details today and make sure you’re on the right track.

Scroll to Top