Car insurance is one of those necessary expenses that many drivers don’t fully understand. Misinformation and myths often circulate, leading people to make costly mistakes when selecting their coverage. Let’s debunk some of the most common car insurance myths so you can make informed decisions and avoid unnecessary expenses.
Myth #1: Red Cars Cost More to Insure
Reality: Despite the long-standing belief that red cars come with higher insurance premiums, the color of your car has no impact on your insurance rates. Insurers focus on factors like your car’s make, model, age, engine size, safety features, and the driver’s history. So, feel free to pick any color you like without worrying about it affecting your insurance costs.
Myth #2: Older Cars Don’t Need Comprehensive or Collision Coverage
Reality: While older cars may depreciate in value, they can still benefit from comprehensive and collision coverage, depending on their condition and usage. If your car is still valuable or would be expensive to repair, keeping these coverages might be a smart decision. However, if your car’s value is very low, it may make sense to drop these coverages and rely on liability insurance instead.
Myth #3: Personal Insurance Covers You for Business Use
Reality: If you use your car for business purposes—like food delivery or ridesharing—your personal insurance policy may not cover you in case of an accident. You’ll likely need a commercial policy or a rideshare endorsement to ensure you’re fully covered while using your car for work.
Myth #4: Your Insurance Follows the Driver, Not the Car
Reality: In most cases, insurance follows the car, not the driver. This means if someone borrows your car and gets into an accident, your insurance policy may be responsible for covering the damages. However, some policies have exceptions, so it’s always best to check with your insurer before lending your car.
Myth #5: Minimum Liability Insurance Is Enough Coverage
Reality: While carrying the minimum required liability insurance keeps you legally covered, it may not be enough to fully protect you in an accident. If you cause significant damage or injuries, the costs can quickly exceed your policy limits, leaving you personally responsible for the remaining expenses. Consider increasing your liability limits for better financial protection.
Myth #6: If Someone Else Crashes Your Car, Their Insurance Pays
Reality: If you let someone borrow your car and they get into an accident, your insurance is typically the primary coverage, meaning your policy will likely be responsible for the damages. The driver’s insurance may serve as secondary coverage, but it depends on the policy terms.
Myth #7: Comprehensive Coverage Includes Everything
Reality: Comprehensive coverage protects against non-collision incidents like theft, vandalism, fire, and natural disasters. However, it does not cover damages from an accident—collision insurance covers those. Understanding the difference helps ensure you have the right coverage for different scenarios.
Myth #8: Car Insurance Covers Personal Belongings in Your Car
Reality: If your personal belongings, like a laptop or phone, are stolen from your car, your auto insurance won’t cover the loss. Instead, these items are usually covered under a homeowner’s or renter’s insurance policy.
Final Thoughts
Believing in car insurance myths can lead to poor coverage choices, leaving you financially vulnerable in case of an accident. By understanding the facts, you can make informed decisions and ensure you have the right protection for your needs. Always review your policy, ask questions, and compare insurance options to get the best coverage for your situation.