Report identifies biggest car insurance myths

Photo (c) Kittisak Jirasittichai EyeEm – Getty Images

If you own a car, you almost certainly have an auto insurance policy. You write a check every month and you have the peace of mind that in the event of an accident, you are protected against a major loss.

For the most part, that’s true. But how much do you really know about what your auto insurance covers and what it doesn’t? A new survey from Insurify has revealed that there are at least four major car insurance myths.

The biggest myth is that everything is covered if you have full coverage. The survey found that 78% of policyholders believe this to be true.

It’s not. Despite its name, comprehensive coverage does not cover all damages incurred in an accident. In reality, comprehensive coverage covers damage not related to a car accident like theft, vandalism, or a tree falling on your car in the driveway.

Civil liability for bodily injury

Personal injury liability coverage is also misunderstood. Almost all states require drivers to have this coverage. In the event of an accident for which the insured driver is responsible, the insurance covers the medical costs of those in the other car.

But 52% of respondents believe this coverage also pays their medical bills. This is not the case. Bodily Injury Liability will not cover the offending driver’s medical expenses if they are also injured.

Maybe you’ve heard that if you’re driving a flashy vehicle – maybe bright red or yellow – you’re more likely to be pulled over by a police officer for a moving violation. This may or may not be the case, but many people assume that these colors also increase insurance rates.

In fact, 36% of survey respondents said they would expect to pay a higher premium for a brightly colored vehicle. The color of the car, however, is not a factor used to set rates. Insurance companies set rates based on the driver’s record, location and personal profile, as well as the age, make and model of their vehicle.


Finally, there is a widely held belief among auto policyholders that auto insurance is essentially a “one size fits all” situation. Once an insurance company offers a rate, 33% of drivers believe there is no way to pay less.

But almost all insurers offer discounts. Safe driving discounts are based on the insured’s driving record. There may be other discounts for not driving many miles or for bundling home and auto insurance.

Katrina, of Newark, NJ, knows about the insurance discounts because she got one, at least temporarily, from State Farm.

“My premium has been reduced due to the pandemic,” Katrina wrote in a ConsumerAffairs review. “It has increased because the world has reopened. They offer many discounts to help you with the lowest fare possible.

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