Fact or Fiction – Debunking 5 Common Auto Insurance Myths
It’s no myth that California drivers are required to have auto insurance to operate a motor vehicle on the state’s highways. But, what’s interesting is the number of myths that many drivers believe to be true…that aren’t. Whether it’s through hype or just having several misinformed drivers repeat them often enough, they’ve become part of the mythological automobile insurance landscape. And, it’s time to debunk them.
Insurance companies are not all alike nor do they handle claims the same way. Some auto insurers have a good reputation when settling accident injury claims, while others have a reputation of being uncompromising and difficult to work with. Separating fact from fiction can make looking for auto insurance and dealing with prospective insurers a great deal easier, if you know the difference between what you may have heard…and what’s actually true.
Common Myth #1 – If my buddy borrows my car and crashes, his insurance pays
If my buddy borrows my car, his personal auto insurance policy covers him and any damage or injuries he causes. Unfortunately, that isn’t the case, according to the Property Casualty Insurers Association of America. Your insurance will cover your buddy or any other user to whom you grant permission to drive your vehicle, not theirs. By handing them your keys, you’ve essentially handed them your insurance – and a worry free ride to anywhere at your potential expense, should they have an accident.
Common Myth #2 – Minimum liability coverage is more than enough
While driving a car with the minimal liability coverage required by the state of California permits you to drive the state’s highways, it can often be insufficient to cover bodily injury or property damage, if you’re at fault in a serious accident. With a minimum of $15,000 per person and $30,000 maximum for a carload of badly injured people, many underinsured drivers involved in accidents can be overwhelmed by additional financial liability.
And, because the state’s minimum liability limits haven’t kept pace with the rising medical and claim costs following an accident, you could be held financially responsible for injuries and property damage that exceed your minimum coverage – all out of your own pocket.
Common Myth #3 – Red cars pay more for auto insurance
Does driving a red car really cost you more in auto insurance? Not even close. The color of the car has no effect on your rates unless you happen to be prone to speeding and draw attention to yourself. White and silver vehicles are just as likely to get tickets as red cars. So, color doesn’t determine your premiums.
However, should you go out and buy a high performance sports car that happens to be red, your insurance company will only determine your rates by the type of car you just bought, which will be the main reason they raise your rates. In other words, it won’t be the color, but the model, body type, engine size, and overall safety record of the vehicle that’ll dictate how much you pay.
Common Myth #4 – Older cars are cheaper to insure
Your vehicle loses value the moment you drive it off the lot. Older cars lose their value through depreciation as they age, but that may not cause you to pay significantly lower insurance rates. If it’s an expensive vehicle to repair or shows up on the most stolen list year after year, according to the National Insurance Crime Bureau, your premiums will remain on the high side.
Of course, if the vehicle isn’t worth much and you’re looking to save money, some policyholders choose to eliminate their collision and comprehensive coverage. But, keep in mind, if your vehicle is stolen or totaled by an uninsured motorist, you won’t be compensated for any amount. Should you opt to retain these coverages, you can increase your deductibles. That, in itself, can save you a few bucks on your premiums.
Common Myth #5 – My auto insurance covers items stolen from my car
Many people believe their auto insurance covers items stolen from their vehicle. This would be wrong. Leaving your laptop or iPhone in your car overnight, while parked outside your friend’s house or in a movie theatre parking lot does not automatically mean you’re covered. Your personal belongings, expensive as they may be, are not covered by your auto insurance policy.
On the positive side, something permanently installed, such as the radio, seats, or spare tire off the back of your Jeep Wrangler, would be covered. Furthermore, your homeowners or renters insurance would kick in to reimburse you for the belongings left inside the vehicle, as long as your policy includes off-premises coverage, which protects your stuff anywhere in the world.
Remember, just because someone heard something somewhere and thinks it’s true… doesn’t necessarily mean it is. That’s why; don’t rely on what somebody else tells you – check it out for yourself, so you don’t end up believing in a myth rather than a fact.
The same can be said about your premiums. Don’t rely on what you believe to be a good deal. Make sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?
Did you believe any of these myths to be true? Feel free to share your thoughts in the comments section below.