5 Common Auto Insurance Myths That Could Cost You Money
Auto insurance can be confusing and hard to grasp the full concept of what is covered. With the amount of misinformation online, there are myths about your coverage that could leave you paying more than necessary or, worse, facing the unexpected after an accident.
Understanding how auto insurance truly works can help you make informed decisions and find the best plan. Below are the five most common auto insurance myths and the truth behind them.
Myth #1: Red Cars Increase Your Premium
One of the oldest auto insurance myths is that driving a red car automatically means you'll pay higher premiums. While that is a common belief, the color of your vehicle has little to do with how much you pay for insurance.
What Actually Affects Your Premium?
Insurance companies look at factors such as
The make and model of your vehicle
The vehicle's age
Repair and replacement costs
Safety ratings
Theft rates
Your driving history
Where you live
Annual milage
Your chosen coverage limits and deductibles
A sports car may cost more to insure than a sedan, but that's because of its performance, repair costs, and claims history, not because it's painted red.
At the end of the day, choose a vehicle color you love and don't worry about it increasing your insurance premium.
Myth #2: Full Coverage Means You're Covered for Everything
Many drivers ask for "full coverage" when purchasing auto insurance, assuming it protects them from every possible situation. In reality, "full coverage" isn't an official insurance policy.
Typically, full coverage refers to a combination of
Liability coverage
Collision coverage
Comprehensive coverage
While these cover many common situations, they don't cover everything.
Coverage That May Require Additional Protection
Depending on your needs, you may also want
Roadside assistance
Rental car reimbursement
Gap insurance
Uninsured or underinsured motorist coverage
Customer equipment coverage
Rideshare coverage
Every insurance policy has exclusions, deductibles, and coverage limits. That's why it's important to review your policy regularly and ask questions about what is and isn't included.
Myth #3: My Insurance Covers Anyone Who Drives My Car
Many people believe that if someone borrows their vehicle, their insurance will automatically cover any accident they may have. This is true in some cases. Not every policy will cover drivers that aren't listed on your plan. It's best to check before lending your car.
Insurance generally follows the vehicle, but there are important exceptions.
Coverage can depend on
If the driver had your permission
If they live in your household
Whether they are excluded from your policy
The specific terms of your insurance company
For example, regularly allowing someone who lives with you to drive your vehicle without listing them on your policy could create problems if they are involved in an accident.
Before Lending Your Vehicle
Ask youself
Is this person licensed?
Is it someone who regularly drives my car?
Are they covered under my policy?
Contact your insurance agent beforehand if you are unsure about what your policy says about lending your car.
Myth #4: Older Cars Don't Need Comprehensive or Collision Coverage
It's true that older vehicles may not need every type of coverage forever. Automatically dropping comprehensive and collision insurance, though, may not be the right choice. You will want to check a few key details before making the final decisions.
Ask yourself
Could you comfortably replace your vehicle tomorrow if it were totaled?
Is the vehicle still worth several thousand dollars?
Do you rely on it every day for work or school?
Comprehensive coverage helps pay for damage from events like
Theft
Vandalism
Falling tress
Fire
Hail
Animal collisions
Collision coverage helps pay for damage after an accident, regardless of fault (subject to your policy terms and deductible).
Sometimes the annual premium is low enough that keeping these coverages still makes financial sense. Working with a professional from Rumbaugh Insurance can help compare the value of your vehicle against the cost of maintaining additional coverage.
Myth #5: My Insurance Rates Only Go Up After an Accident
Accidents can certainly affect insurance premiums, but they aren't the only reason rates increase. There are multiple reasons your premiums can fluctuate throughout the year, none of which have anything to do with your driving history.
Many factors influence insurance costs, including
Inflation
Rising repair costs
Increased medical expenses
Severe weather claims in your area
Vehicle technology
Supply chain issues
Theft trends in your area
Changes in state insurance regulations
Even if you've maintained a perfect driving record, your premium could change because of broader market conditions.
Ways You May Be Able to Lower Your Premium
Ask your insurance agent about
Bundling home and auto insurance
Safe driver discounts
Defensive driving course discounts
Good student discounts
Multi-vehicle discounts
Increasing your deductible (if appropriate)
Reviewing your coverage annually
Shopping for your policy through an independent insurance agency can also help you compare rates from multiple insurance carriers without contacting each company individually.
Why Working With an Independent Insurance Agency Matters
Insurance isn't a one-size-fits-all situation. An independent insurance agency partners with multiple insurance companies, allowing them to compare policies and pricing based on your needs.
Rather than relying on assumptions or outdated information, an experienced agent can help you
Understand what your policy covers
Identify potential gaps in protection
Find available discounts
Review your coverage as your life changes
Compare options from multiple insurance carriers
At Rumbugh Insurance, we take pride in helping those find insurance that meets their needs and stays within their budget. Having access to a variety of carriers allows us to find you the perfect policy and give recommendations when needed. We help over a thousand clients annually throughout Pennsylvania, Maryland, and Virginia.
Get The Right Protection
Auto insurance myths can lead to costly mistakes, whether that means paying for unnecessary coverage or discovering too late that you weren't protected when you thought you were.
Taking the time to understand how your policy works and reviewing it with a trusted insurance professional can help you make confident decisions and avoid unexpected expenses down the road.
If it has been a while since you last reviewed your policy, contact Rumbaugh Insurance today. Our team is ready to help make sure you have the coverage you need.
FAQs
What is considered "full coverage" auto insurance?
"Full coverage" mainly refers to a policy that includes liability, collision, and comprehensive coverage. It does not cover every possible situation you may encounter when operating your vehicle. Additional coverages like roadside assistance, rental reimbursement, or gap insurance may need to be added separately.
Does the color of my car affect my insurance rates?
No. Insurance companies do not typically base premiums on vehicle color. They consider factors like the vehicle's make, repair costs, safety features, and more.
If someone borrows my car, are they covered by my insurance?
Insurance follows the vehicle if the driver has your permission in most cases. The final coverage will depend on your policy and the driver's relationship to you. It's important to review your policy details with your agent before lending your car.
Should I keep comprehensive coverage on an older vehicle?
It depends on the vehicle's value, your financial situation, and how easily you could replace it. If replacing the vehicle would create a financial hardship, keeping comprehensive and collision coverage may still be worthwhile.