Busting 8 Car Insurance Myths

Common myths around car insurance claims busted - Admiral.com
Your car is one of your most valuable assets, and you should protect it by getting a reliable insurance policy. But because auto insurance has its fair share of myths, it’s understandable if they keep you from purchasing a policy. To shed some light on the truth, read on to learn whether or not these myths are true.

1. Your Policy Will Lapse Even Before It Expires

You might have heard that your auto insurance policy will lapse if these things happen to you: 

  • You got into an accident 
  • You were issued a ticket 
  • You left the state 

Don’t worry because even if one of these things happens to you, your car insurance company will not cancel your policy. The only time they will cancel is if you haven’t paid your premiums. As long as you pay regularly, you can rest assured that your car insurer will keep their end of the bargain for the duration of your contract.  

2. No-Fault Insurance Means You Are Not At-Fault

Although it can be confusing, having no-fault insurance doesn’t guarantee or in any way mean that you can’t be held liable in an accident. No-fault insurance is required by law to ensure that in case a driver got injured in an accident, their policy will be able to cover their medical bill regardless if the incident was caused by them or not.

3. If You Lend Someone Your Car, Their Insurance Will Cover the Damage

To sum it up, your car insurance policy protects your vehicle. If, for example, you let a friend borrow your car, and they, unfortunately, got involved in a road crash, your policy would pay for the damage. But, for instance, if your policy isn’t enough to cover the costs of the damage, then your friend’s policy can be used as backup coverage.  

4. The Color of Your Car Determines the Price of the Policy

This is entirely false. Whether your car is painted red, black, or gold, it wouldn’t affect or be taken as a factor in pricing your insurance. The things that affect the price of auto insurance are but are not limited to the following: 

  • Your car’s make, model, body type, and engine size 
  • Your car’s safety features 
  • The predicted cost it will take to repair or replace your car following an accident

5. Younger Drivers Pay Higher Car Insurance Rates

Believe it or not, this is actually true. Younger drivers, specifically those under the age of 25, pay higher insurance premiums. The main reason behind this is that a huge percentage of drivers who get involved in an accident are mostly under 25 years old. On the bright side, the price of auto insurance gets cheaper as a driver ages, especially if they manage to maintain a clean driving record.

6. You Only Need To Buy the Minimum Auto Liability Insurance Required by Your State

Each state has its own required minimum amount of liability insurance that drivers need to acquire. Let’s take the state of North Dakota as an example. In this state, it is required by law that all cars must have these minimum amounts of insurance coverage: 

  • Bodily injury: $25,000 per person and $50,000 per accident  
  • Property damage: $25,000 per accident  
  • Uninsured motorist: $25,000 per person and $50,000 per accident 

You have the choice to purchase a policy that only lets you carry the required amount. But if you want maximized protection, it’s better to get a policy that can provide a higher amount of coverage.

7. Installing Safety Features on Your Car Will Lower Your Insurance Rate

This one will depend on your chosen insurer. However, don’t expect much. Repairs are more expensive than ever. Hence, there’s a higher chance that insurance companies will likely charge greater premiums to make things even.

8. DUIs Spike Your Car Insurance Rates

Yes. One of the consequences of being charged with a DUI is an increase in a driver’s auto insurance premium. A single DUI charge can increase one’s rate up to 96%, and it will only keep on rising for each repeat DUI offense.

Bottom Line

The myths on car insurance rates go on. Some are true, while some are not. What’s important is that when looking for one, you need to fully know what your car insurance policy entails and what it doesn’t cover before signing the contract.  

You shouldn’t hold back in asking questions. Make sure your insurance agent has explained certain clauses in your policy that you don’t understand so that you won’t have any regrets later on.