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The Car Insurance Myth: 8 Falsehoods that Need Debunking

Personal Insurance

Auto insurance can come in handy during difficult and stressful periods of life. So, you should try to understand what your policy does and does not cover. That’s why it’s important to separate fact and fiction. We’ve compiled info to help you identify a car insurance myth when you hear it.

Car Insurance Myth: If someone borrows your car, their insurance will cover any accidents they cause.

Car insurance typically follows the vehicle, not the driver. So, your policy will most likely cover damages and medical bills, no matter who is behind the wheel.

MTG Insurance | Car Insurance Myth | Family Driving in a Car

Car Insurance Myth: Red cars are more expensive to insure.

A vehicle’s color doesn’t impact premium rates. Instead, insurance carriers calculate them based on factors such as:

  • Make, model, year, engine size, and body type
  • Safety features and ratings
  • Cost to repair or replace the vehicle
  • Chances the car will be stolen or vandalized

Car Insurance Myth: It’s fine to purchase the minimum liability coverage required by your state.

If you can afford more coverage than the state minimum requirement, you should purchase it. State minimums will keep you out of legal trouble. However, you will still have to pay large sums for damages, medical bills, and court settlements if you’re ever found at fault for an accident. Those costs can soar quickly, so many believe the lower premiums associated with state minimums aren’t worth the risk.

Car Insurance Myth: Credit scores don’t affect insurance premiums.

Credit scores demonstrate financial reliability, so insurance companies often use them to calculate rates. Therefore, if you can raise your credit score, you might be able to lower your car insurance premium.

Car Insurance Myth: Insurance will pay to replace a totaled car with a new one.

Insurance companies factor in depreciation when reimbursing customers for totaled cars. So, they’ll consider your car’s age and any wear and tear it may have suffered over the years before settling your claim. As a result, you’ll most likely receive money to replace your vehicle, but it probably won’t equal the original purchase price.

Car Insurance Myth: Expensive cars cost more to insure.

When determining your premium, your carrier will consider the cost of repairing or replacing your vehicle, the model’s loss history, and similar factors. But that doesn’t necessarily mean your vehicle’s price tag will affect the rate.

Car Insurance Myth: Personal auto insurance covers a vehicle when it’s also used for business.

Business use has its own set of unique risks for a vehicle, and it often requires a specific type of coverage. Therefore, if you’re driving your own car while conducting company business, you should check with your MTG agent to ensure you’re sufficiently covered.

Car Insurance Myth: Traffic violations always increase insurance premiums.

A single, minor traffic violation probably won’t impact your rate much—if at all. However, you still need to maintain a clean driving record because severe or numerous violations will start to raise your premium. 

As you can see, a lot of misinformation has clouded the general public’s knowledge of car insurance. So, get the facts by consulting an MTG agent so you can find the right policy at the right rate. Call us for the best and latest insurance information.