9 Car Insurance Myths

Article by Juan Garzon

Drivers are legally required to have current car insurance in nearly every state. Car insurance is important for many reasons but, there are many misconceptions related to it as well. This article will attempt to address some of the myths that many Americans assume about their auto coverage.

1. Full Coverage is a general phrase concerning what car insurance policies include, still, it is deceiving as there is not insurance that covers all accidents completely. Auto policies have limits maxing out the total they will pay for a loss brought upon another driver. Also, most auto policies will only pay the Actual Cash Value if your car is totaled otherwise known as a complete loss. Actual Cash Value is the value of your car before the insurable incident. It is not related to what it would cost to replace your car.

2. Any person over 25 is covered to use my car. Who is covered to drive your vehicle will differ from policy to policy. Still, a generalized auto policy will only cover those drivers listed on your policy and insurance card. To clarify whether infrequent drivers that have authorization to operate your car are covered, you should consult your policy or insurance agent.

3. Red automobiles are more expensive to insure. This tall-tale began when people began speculating that red vehicles were more likely to be pulled over because a red car would be more visible to the police. The truth is speeding tickets will influence premiums; the color of your car does not.

4. If I let a friend borrow my car and the friend totals my vehicle, their insurance company will cover the accident. This depends on what state you live in. Certain states will make your friend who was operating your car pay back the insurance carrier if your vehicle is damaged due to their error.

5. I can buy car insurance after the incident and I’ll be taken care of. Insurance is intended to protect against unanticipated accidents. This logic could be equated to purchasing a lotto ticket after the numbers were pulled and assuming to win. Attempting to purchase an auto policy to cover an incident that has already occurred is also known as insurance fraud and could land you in jail.

6. My loan will be paid in full if my vehicle is unsalvageable. As cited earlier, most insurance policies will only cover the Actual Cash Value of the car, which is the value of your car minus any applicable depreciation. If you’re upside down on your car loan, meaning you owe more money than the Actual Cash Value to your lender, you very well may end up owing the remainder of the loan you have on a car that is no longer functioning.

7. If I have any personal belongings in my vehicle, my auto insurance will take care of me. Car insurance is only intended to insure the car and the owner of the car, not personal belongings inside the vehicle. Personal belongings in your vehicle can be covered by a renters or homeowner policy.

8. I don’t want to put my teenager on my policy because I don’t want to be held responsible if they get in a wreck. Parents are always answerable for the actions of their teenage drivers without exception. Your auto policy does not cause the risk or liability; it provides coverage for the parent against that liability. If a teen driver is not covered, their parent will still be held accountable for any damage they cause while behind the wheel.

9. The only option to get insurance to drive any car is by buying “non-owners” insurance. Car insurance provides litigious coverage for the car’s owner. The vehicle involved in an insurable event won’t be standing in front of a judge to answer any lawsuits stemming from an accident; it will be the person who owns the car. Therefore, in most instances with few exceptions, your auto policy will provide coverage when you are operating another person’s car.

There are many fallacies related to car insurance. It is best to research these myths so you’re not put in a bad situation when purchasing car insurance. Disproving these fabrications will keep you better familiarized and armed against risk before buying car insurance. Always be sure to go over your concerns with your car insurance agent.

About the Author

Juan Garzon writes insurance articles for and about Tulsa Car Insurance (Oklahoma)

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