Auto Insurance Myths and Facts

| April 06, 2015

Monday, April 6, 2015

Being in the auto insurance business, we are often asked whether or not certain myths about auto insurance are true or if they are just as we stated: myths. Some of the more common misconceptions include:

  • “Owners of red cars pay more than owners of other colored cars.”
  • “My auto policy will definitely pay off my loan if my car is totaled.”
  • “The minimally required amount of insurance is always enough to pay any claim.”
  • “My car insurance will pay the claim if my personal items are stolen from my car.”

The fact is all the above statements are simply untrue. Here are the facts to debunk the common myths we have all heard:

  • The color of your vehicle has no bearing on the amount you will pay in premium. Your rate is determined by your car’s make, model, year plus other factors that do not include the color at all. You can paint your car whatever color you want without it changing your premium at all.
  • Your loan amount has little to do with the insurance value of your vehicle. If your car is totaled, you will receive a lump sum amount based on the value of your vehicle at the time of the accident. While it may be equal to your loan amount, it is not guaranteed.
  • Unfortunately, most claims exceed the limits set on a minimally required insurance policy. You should base your insurance on your needs instead of what the law requires in order to have your claims paid more effectively.
  • Your auto policy does not cover personal items in your vehicle. In order to have coverage for them you will need to have homeowner’s or renter’s insurance or a separate policy.

Please call 888-827-0930 with any questions about “myths” you may have heard about car insurance.