Car Insurance Myths Debunked: Common Misconceptions

​Car insurance is a crucial part of responsible vehicle ownership, providing financial protection in the event of an accident, theft, or other damages. However, there are several misconceptions about how car insurance works, and these myths can lead to confusion or poor decision-making when it comes to purchasing or managing your policy. In this blog, we will debunk some of the most common car insurance myths and provide accurate, reliable information to help you better understand your coverage.

Myth 1: Red Cars Cost More to Insure
One of the most persistent myths in car insurance is that red cars are more expensive to insure. Many people believe that because red cars are more eye-catching and thought to be driven more aggressively, they result in higher insurance premiums. However, the color of your car has no impact on your insurance costs. Insurance companies do not factor in vehicle color when calculating premiums. Instead, they consider factors like the make, model, engine size, age of the car, your driving record, and location.

Myth 2: Your Credit Score Doesn’t Affect Your Insurance Rates
Many drivers are surprised to learn that their credit score can affect their car insurance premiums. While it may seem unrelated, insurers use credit-based insurance scores in many states to predict the likelihood of a policyholder filing a claim. Statistics show that individuals with lower credit scores are more likely to file claims, leading insurers to charge higher premiums for those with poor credit. However, not all states allow this practice, so it's important to check your state’s regulations to see if your credit affects your premium.

Myth 3: Minimum Liability Coverage Is Enough
While most states require drivers to carry minimum liability insurance, this level of coverage may not be sufficient to cover all the costs if you're involved in a serious accident. Liability insurance only covers the damages you cause to others, including their medical bills and property damage. If those costs exceed your policy limits, you could be held personally responsible for paying the remaining expenses. To fully protect yourself, it’s often recommended to carry higher liability limits or consider additional coverages like uninsured/underinsured motorist coverage and comprehensive and collision coverage.

Myth 4: Your Insurance Follows You, Not Your Car
A common misconception is that your insurance follows you wherever you go, regardless of the vehicle you are driving. In reality, car insurance typically follows the vehicle, not the driver. If you lend your car to someone else and they get into an accident, your insurance policy is likely the primary coverage for any damages, regardless of who was driving. There are some exceptions to this rule, so it’s important to review your policy to understand how it applies when other people drive your car.

Myth 5: Older Cars Don’t Need Comprehensive or Collision Coverage
Some drivers believe that once a car reaches a certain age, they can skip comprehensive and collision coverage. While it’s true that older cars may not have the same market value as new vehicles, they can still be expensive to repair or replace. Comprehensive and collision coverage can help cover costs for damages caused by accidents, weather, theft, or vandalism. Whether or not to maintain this coverage depends on the value of your car, your financial situation, and your tolerance for risk. If the cost of repairing or replacing your car would be a significant burden, it’s often wise to keep these coverages.

Myth 6: Full Coverage Means You’re Covered for Everything
Many drivers assume that "full coverage" means their insurance will cover any and all damages. However, full coverage is a term used to describe a combination of liability, comprehensive, and collision insurance. It does not necessarily cover everything. For example, full coverage typically doesn’t include extras like roadside assistance, rental car reimbursement, or gap insurance (which covers the difference between the car’s value and the amount you owe on a loan if it’s totaled). Always review your policy details to understand exactly what is and isn’t covered, and consider adding endorsements or additional coverage options if needed.

Myth 7: Your Premium Will Skyrocket After One Ticket or Accident
While it’s true that traffic violations and at-fault accidents can lead to higher insurance premiums, a single ticket or minor accident may not cause your rates to skyrocket. Many insurers offer accident forgiveness programs, where your first at-fault accident doesn’t result in a premium increase. Additionally, the severity of the infraction matters—serious violations like DUI can have a significant impact on your rates, but minor offenses like a parking ticket or small speeding violation may have little to no effect, especially if you have a clean driving record.

Myth 8: You Can Cancel Your Insurance Once You’ve Paid Off Your Car
Some drivers believe that once their car loan is paid off, they can drop their insurance coverage. However, almost every state requires drivers to maintain liability insurance, regardless of whether the car is financed or fully owned. Even if you’ve paid off your vehicle, having insurance protects you from significant financial losses if you're involved in an accident or your car is damaged. Without proper coverage, you could face legal penalties or be held liable for costly expenses out of pocket.

Myth 9: You Don’t Need Insurance for a Leased Vehicle
Leased vehicles require just as much, if not more, insurance coverage than cars you own outright. Most lease agreements mandate that you carry comprehensive and collision coverage, as well as higher liability limits, to protect the leasing company’s interest in the vehicle. Additionally, many lease agreements require gap insurance, which covers the difference between what the car is worth and what you still owe on the lease in case it’s totaled.

Myth 10: Reporting a Claim Always Raises Your Premium
Not all claims will result in an increase in your premium. Insurers consider several factors when determining whether to raise your rates, such as the severity of the claim, your fault in the accident, and your overall driving record. Minor claims may not lead to premium hikes, especially if you’ve had a long history of safe driving. However, more frequent or costly claims are more likely to result in higher premiums. If you’re unsure whether a claim will impact your rates, it’s a good idea to talk to your insurance agent before filing.

Conclusion
Understanding the facts behind car insurance is essential for making informed decisions about your coverage. Avoiding common myths and misconceptions can help ensure that you’re adequately protected and not paying more than necessary for your policy. By staying informed, reviewing your coverage regularly, and discussing your needs with your insurance provider, you can make sure you have the best possible coverage at the most reasonable cost. Don’t let car insurance myths lead you astray—knowing the truth will help you stay financially secure and protected on the road.

At Desmond Insurance, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get insurance that fits your needs. You can get more information about our products and services by calling our agency at (859) 491-5100. Get your free quote today by CLICKING HERE.

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.​