Top Car Insurance Myths and Schemes

Red car on the road
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Do you think you know a lot about car insurance? Do you struggle with knowing what is true or false when talking about car insurance with family and friends? Sometimes car insurance can get confusing especially when car insurance myths are spread as truths. It is time to get to the bottom of these common myths once and for all.

Myth 1: Car Insurance Covers the Full Cost of Any Possible Disaster or Accident

Oh, if only it were so easy. There are many different types of car insurance, and each one covers different things. Your specific policy can combine many different types of insurance coverage, but achieving “full coverage” isn’t as simple as calling up an insurance company and asking for the full package.

If you only purchase the minimum coverage required by your state, the only things that will be covered are usually damages to another person’s car, body, and property if you hit them (damage to your own vehicle will be covered by the other party’s insurance). In many states, you’re also required to purchase personal injury protection, or PIP, which would cover your medical costs in the event of an accident.

If you think you are covered for every possible disaster if you purchase comprehensive coverage, think again. It is true that you will be covered by acts of nature such as hail, fire, or hitting a deer, as well as theft or vandalism, but you won’t have the fullest standard protection unless you also purchase collision coverage. This type of coverage covers you if you cause damage to yourself or your own vehicle through an at-fault accident or if you are a victim of a hit and run accident.

But wait... There’s more. If you purchased a new vehicle using a loan and owe more on the loan than the vehicle is worth, you’ll probably want to buy gap insurance, which covers the difference in the event that your vehicle is totaled. If an uninsured motorist hits you, you’re out of luck unless you have uninsured motorist coverage. Don’t assume towing, roadside assistance, or rental coverage is included in your policy without checking.

Myth 2: Red Cars Cost More to Insure

If you’ve ever purchased car insurance before, you know that this is a myth. Why? Because car insurance companies never ask you to list your vehicle’s color!

In a standard application, you’ll be required to list the make, model, year, and any non-standard specifications of your vehicle, as well as provide a slew of personal information about yourself and any other persons who will regularly be driving the vehicle.

So why don’t insurance companies ask about the color of your car? Insurance companies are in the business of making money, and if there was any evidence that your car’s color had anything to do with how likely you were to get speeding tickets, they would definitely ask about your color when calculating your car insurance premium amount. But according to numerous studies, there’s no evidence to show that red cars are pulled over by the police more often than cars of other colors. In case you’re wondering, the most commonly pulled-over vehicle color is apparently...white.

If you’re driving a vehicle that is expensive to repair or can reach very high speeds quickly (aka a sports car), that will certainly make your premiums rise.

If you do get pulled over and ticketed for speeding often, you can almost guarantee that your premiums will rise. But that has nothing to do with the color of the car—it just means you’re not a super safe driver!

Myth 3: If I’m a Driver for a Rideshare App, My Normal Insurance Will Cover Me

Don’t even think about becoming a driver for a ridesharing app before you determine the amount of rideshare insurance you will need and whether or not your insurance company will allow you to stay under your existing policy. If you’re in an accident while driving for business, it is very unlikely that your insurance company will cover you under a non-commercial policy. If you’re trying to make some extra money, educate and protect yourself well before you get behind the wheel.

Myth 4: Thieves Love to Steal Vehicles That Are Fast, Shiny, and Expensive

Expensive cars are usually designed to attract attention—which is exactly what would-be thieves want to avoid. According to the National Insurance Crime Bureau, the most commonly stolen cars in 2017 ​were the 1997 Honda Accord and the 1998 Honda Civic—which certainly do not qualify as sports cars!