Urban legends about car insurance
Here’s our version of Myth Busters: now that you’re on your own, it’s time to learn the truth about auto insurance.
Myth: Red cars are the most expensive to insure.
Fact: A red car won’t cost you more than a green, yellow, black or blue car. Insurers are interested in the year, make, model, body type, engine size and age of your vehicle. How you’re perceived based on the color of your car is another matter.
Myth: My insurance will cover me if my car is stolen, vandalized or damaged by hail or fire.
Fact: Unless you have comprehensive coverage, you’re not covered for any of these things. Comprehensive coverage pays for damage to your car that is not the result of a car accident.
Myth: If my car is totaled, my insurance will pay off what I owe on my loan or lease.
Fact: It will only pay you the actual cash value of your car, minus your deductible, factoring in depreciation. You’re still responsible for any outstanding amount on the loan or car lease.
Myth: If someone else drives my car and gets into an accident, their auto insurance will cover them, not mine.
Fact: In most states, the car owner’s insurance must pay for damages caused by an accident. Get familiar with the laws in your state before allowing another person to drive your car.
Myth: My credit doesn’t affect my insurance rate.
Fact: In many states, insurers generate a numerical ranking based in part on your credit behavior, known as the “insurance score.” Studies have shown that how you manage your finances can help predict the likelihood that you’ll be involved in an accident. To learn more about how your credit affects your rate read our credit use FAQs page.
The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.