There are many car insurance myths circulating the streets today, and it can be hard to decipher fact from fiction. In an effort to help you separate truth from misconception, we have compiled some of the most common auto insurance myths that we hear from our clients. Hopefully we can debunk the myths for you!
Does a red vehicle cost more to insure?
Believe it or not, NO! When you come into the office to start an auto policy, we don’t even ask what color your car may be. It doesn’t matter if your car is black, yellow, clear or zebra. The model, make, year, engine size of the car, how many miles you drive, where you drive, accident history, and credit history will play a role in determining the price, but NOT the color.
Will car insurance pay off my loan if my car is totaled?
If your car is totaled, your insurance company will pay you the actual value of your car (before the accident), minus your deductible. Some consumers have outstanding balances on their cars that are greater than the value of their vehicles. The only way to cover the difference is to purchase gap insurance. This coverage, for an additional charge, will pay the difference between your loan balance and the value of your car.
Do more expensive cars cost more to insure?
This myth is partially true. The cost of a vehicle does influence the price of insurance, but other factors are also considered, such as your driving record, how many miles you drive, etc. However, more expensive cars tend to have more costly replacement parts so this is also a factor when insurance companies develop rates.
If a friend borrows my car and gets in an accident, who is responsible for the damages?
The insurance covering the vehicle is considered the primary insurance, which means that your insurance company must pay for damages caused by an accident from someone else driving your car. Therefore, before handing the keys over to your friend, make sure this individual is someone you trust, because you and your insurance company are responsible if something happens while he/she is driving your car. If your insurance limits aren’t enough to cover all the damages, your friend’s (the driver of your vehicle) insurance would be next to pay for the remainder of the damages.
Does “Full Coverage” include rental and towing coverage?
No! Rental and towing coverage must be purchased separately or via special “riders” offered by your insurance company. There really is actually no such thing as “Full Coverage”, as there are always things that aren’t covered by insurance. Typically when someone refers to “Full Coverage”, they are referring to a policy that includes “Collision” and “Other than Collision” coverage’s for a car. However, there are still various additional add-ons that can be purchased for additional costs.
If items are stolen from my car, are they covered under my auto policy?
More times than not, it’s your homeowners or renters policy that protects anything stolen from your car. There are some “riders” that can be purchased for auto policies that give very limited coverage for personal belongings in your car, but typically you need to submit a claim under your home or renters policy for this.
Does buying insurance online save me money?
Not necessarily, and it may actually end up costing you money in the long run! Purchasing a policy online without the advice and expertise of a real-life insurance agent could prove to be a costly mistake. Online insurance providers can’t recommend individualized protection plans for you. While price is certainly important, coverage is even more critical, and you should always seek the advice of an expert before buying.