It’s no secret that car insurance policies can be confusing. You may understand that auto insurance is meant to protect you in the event of an accident, but beyond that, it is difficult to clarify the facts about your policy. There are many misconceptions that are tossed around about insurance policies regarding cost, coverage, liability, and more. The danger in these myths is that they may lead you to believe you’re covered in an accident when you are not, which can be a costly mistake. Below are five common myths about car insurance.
MYTH 1. ALL YOU NEED IS THE STATE MINIMUM AMOUNT OF INSURANCE
It is true that states only require a certain amount of auto insurance. Most states only mandate that you have liability insurance so that if an accident occurs, damages to the other party’s vehicle is covered up to a specified limit. However, the minimum amount set by most states may not be enough to fully cover an accident, so there is a higher chance you’ll be paying out of pocket for repairs and possible medical bills. Liability coverage also does not cover your own vehicle, so any damages to your car will fall on you as well.
MYTH 2. IF ANOTHER PERSON GETS INTO AN ACCIDENT WITH YOUR CAR, THEIR INSURANCE COVERS IT
Although this myth sounds reasonable, it unfortunately is not true. Insurance follows the car rather than the driver, so the primary insurance on a vehicle will be the policy used in case of an accident, regardless of who was behind the wheel.
MYTH 3. THE COLOR OF YOUR CAR IMPACTS INSURANCES RATES
It is not uncommon to hear that red cars cost more to insure because they are linked to more reckless driving. Despite popular belief, insurance premiums do not change according to the color of your car. Insurance companies determine rates based on many factors, such as the make and model of your car, engine size, the cost of repairs, driving history, and more.
MYTH 4. COMPREHENSIVE COVERAGE IS “FULL COVERAGE”
Unlike how it sounds, comprehensive coverage is not an umbrella form of coverage for any instance. It only applies to damages to your vehicle not caused by traffic accidents. Hail, falling tree branches, and striking a deer on the road are just some examples of what is covered with comprehensive coverage. There are many other types of coverage, such as collision and uninsured motorist, so there is no clear definition of “full coverage”.
MYTH 5. PERSONAL INSURANCE COVERS BUSINESS USE OF YOUR CAR
If you are self-employed or use your car to drive for a ride-sharing service like Uber, that may require a separate policy from your personal insurance policy. Driving a vehicle for the purpose of business has additional risks and liability attached in the event of an accident, so it is recommended to check with your insurance provider to ensure you are covered for business use of your vehicle.
CONSULT WITH AN INSURANCE EXPERT ABOUT YOUR POLICY
With so many misconceptions around insurance policies, it can be difficult to understand what coverage you may need, and how your rates are determined. An experienced attorney can provide professional insights on all of these questions and more. Having these answers can give you peace of mind knowing you’re properly covered in the event of an accident. Schedule a consultation to learn more about your insurance policy.