Car Insurance Myths Debunked

car insurance myths debunked

Car Insurance Myths: Myth #1: You have full coverage.

Many people believe that the minimum amount of auto liability insurance required by law is all they need in case they are involved in an auto-accident. This is not true! By Florida Law, you are required to have Personal Injury Protection (PIP) and Property Damage Liability (PDL), both of which cover up to $10,000 each. However, this is not enough when you are involved in a terrible accident or sustain serious bodily injuries. There are coverages that are also important to purchase in addition to the PIP and PDL mandatory by law. A few that you should highly consider purchasing are Bodily Injury Liability (BIL) coverage, Uninsured Motorist (UM) coverage, and collision coverage. Check out a breakdown of these different insurance coverages in our article How Car Insurance Works.

Car Insurance Myth #2: Color determines the price of auto insurance.

The saying goes that red cars are the most expensive to insure and sports cars get ticketed more and pay higher insurance rates. The color of your car will not cost you more money! Insurance companies will most likely not even ask the color of your car when they are determining your car insurance rates. In fact, they are more interested in the year, make, model, age, etc. of your car. Perhaps the belief that red cars pay higher insurance rates comes from the idea that people drive recklessly in red cars.

Car Insurance Myth #3: It costs more to insure your car when you’re older.

It actually doesn’t! Many drivers who are older than 55 years may qualify for discounts in their insurance. Courses for mature drivers are offered by AARP that could potentially reduce your premiums by up to 15%.

Car Insurance Myth #4: Your credit has no effect on your insurance rate.

Very false. In fact, your credit has a huge effect on your insurance rate. Why is that? Your credit score reflects your financial affairs and insurance companies take this into consideration when you want to purchase your auto insurance plan.

Car Insurance Myth #5: Your insurance will cover you if your car is stolen, vandalized or damaged by falling tree limbs, hail, flood, or fire.

With the required minimum coverage in the state of Florida, your insurance will not cover you if your car is stolen, vandalized, or damaged by falling tree limbs, hail, flood, or fire. You would need comprehensive coverage to prepare for any of these situations. This type of coverage pays for damages that are not the result of an auto accident, such as theft, vandalism, fires, etc.

Car Insurance Myth #6: If other people drive your car, their auto insurance will cover them in the event of an accident.

In Florida, the owner of the vehicle’s insurance company must pay for damages from an auto accident regardless of who is driving. This is because the insurance policy covers that vehicle and is therefore considered the primary insurance.

Car Insurance Myth #7: Personal auto insurance covers both personal and business use of your car.

It’s important to make sure you keep a good driving record so that your insurance rates remain low. Commercial insurance coverage may be a little expensive, but one way to ensure that it doesn’t increase is to make sure you and other employees maintain good driving records. It’s also important to understand that personal auto insurance may not cover both personal and business use of your car, even if you are self-employed.

Car Insurance Myth #8: Thieves prefer to steal new cars.

Actually, this is the other way around. Statistically, thieves prefer to steal older cars. According to Forbes, the top ten most stolen vehicles in 2015 were:

  1. 1996 Honda Accord
  2. 1998 Honda Civic
  3. 2006 Ford F-Series
  4. 2004 Chevrolet Silverado
  5. 2014 Toyota Camry
  6. 2001 Dodge Ram
  7. 2014 Toyota Corolla
  8. 2015 Nissan Altima
  9. 2002 Dodge Caravan
  10. 2008 Chevrolet Impala

You must be wondering why older vehicles are on the list. This is because older vehicles are often easier targets for thieves and thus there’s a better market for used parts from stolen vehicles. Comprehensive coverage in your insurance plan would cover for theft of your vehicle. For more information, refer to How Car Insurance Works.

Car Insurance Myth #9: If my car is totaled, my car insurance will pay off what I owe on my loan or lease.

Your car insurance policy does not promise to pay what you owe in the event that your car or truck is totaled. It will pay for the current cash value of your car minus your deductible. You would be responsible for any amount left on your loan or lease. What you can do if you want to be covered for the amount you owe on a loan or lease would be to purchase gap insurance.

Car Insurance Myth #10: My auto insurance company will pay for a rental car if my car is stolen or damaged in an accident.

Your insurance policy may not cover a rental car, even if you have comprehensive coverage. You can, however, purchase coverage for a rental car for a relatively low price. However, it’s important to note that this won’t necessarily cover everything since there’s a limit to how much your auto insurance company will reimburse you per day. In addition, there may be a maximum amount of coverage per accident.

Even if you have this coverage, it won’t necessarily last until your stolen car is recovered or your damaged car is fixed. There’s a limit on how much your insurance company will reimburse you per day, plus a cap for a maximum amount per accident.

Now that we’ve debunked the most common car insurance myths, it’s important for you to understand what kind of coverage you currently have and what you should purchase. Remember: What you don’t know CAN hurt you!

If you were recently hurt in an accident, contact our car accident attorneys for a free consultation. We can help fight the insurance companies and pursue more compensation than your insurance company will offer.