Seven Auto Insurance Myths: Debunked
Updated: Aug 1, 2020
Insurance is a confusing topic on its own, and unfortunately, there are several common misconceptions regarding auto insurance. There are a lot of myths floating around and we’re going to debunk seven of them today:
1. The color of my car is a factor when determining my rates:
Contrary to popular belief, red cars do not cost more to insure. You won’t even be asked about the color of your car when you’re being quoted. However, your car’s make and model, year, and engine size are among some of the factors that can have an effect on your rates.
2. If someone else drives my car and they get into an accident, they will be held responsible:
Typically, the insurance policy covering the vehicle is considered the primary insurance. This means that regardless of who is driving the vehicle, the owner’s insurance company will be responsible for paying for any damages.
3. My personal auto insurance will cover me when I use my car for business purposes:
Even if you’re self-employed, chances are you are not protected while driving your car for work-related reasons. If you drive your car for work-related reasons it’s important to speak with your agent about whether or not you need more coverage before you get turned down for a claim.
4. When I turn 25 my rates will automatically go down:
Statistically speaking, drivers under the age of 25 are considered more likely to get into accident. That being said, your rates do not automatically go down just because you’ve turned 25 years old. There are other factors considered, such as your driving record, which ultimately decide if you’ll be paying any less.
5. My auto insurance will cover personal property stolen from my vehicle:
Your renters or homeowners policy is what covers loss of personal property, whether it’s in your home or inside your vehicle. An important note is that your homeowners or renters insurance will only cover 10% of your limit when you’re in transit. For example, if you have a $50,000 worth of coverage, you will be protected for up to $5,000 worth of personal property stolen from your vehicle.
6. Full coverage covers everything:
Even more grossly misnamed than comprehensive coverage, “full coverage” typically refers to the combination of having liability, collision, and comprehensive coverage. In reality full coverage auto insurance doesn’t exist. While this is a solid level of protection, it doesn’t include coverages such as uninsured/underinsurance motorist coverage and rental reimbursement.
7. Small cars are always cheaper to insurance:
While size of your vehicle is a factor in determining your rates, small and mid-size vans and SUVs are typically the cheapest to insure. The reason for this is that smaller cars will usually receive more damage in the event of an accident and the drivers are at a higher risk of filing an injury claim as a result of the accident.
The bottom line is that speaking with your agent and review your policy is the best way to eliminate surprises and make sure you’re getting the best coverage for your situation. Never make assumptions as they can result more money coming out your pocket than necessary.
AZ Insurance Team