9 Myths About Your Auto Coverage That Can Hurt You

If my car is totaled, my loan will be paid by my insurance.

Your insurance company will only pay the Actual Cash Value of your car at the time before the accident. If you owe a substantial amount on your car before an accident, chances are you could end up paying on a loan for a car that is no longer drivable.

Full coverage can cover all accidents in full.

There is not a policy that covers all accidents in full. Auto policies have limits of what they will pay for damages caused to other cars.

Insurance companies have higher rates for red cars.

Insurance companies don’t increase your rates for the color of your car. They increase your rates because of speeding tickets. The myth originated from people believing those with red cars are more likely to receive speeding tickets.

My policy covers anyone over 25 driving my car.

This depends on your policy. Generally, auto policies only cover those listed on the policy and for occasional drivers that have permission to drive the automobile. Ask your insurance agent for the details.

Auto insurance purchased after an accident will cover that accident.

Insurance is designed to cover unforeseen accidents and will not just pay for previous accidents for you.

If my friend borrows my car, his or her insurance will cover anything that may happen to my car.

This depends entirely on the state you live in. In some states, the friend who damages your car must reimburse the insurance company if the vehicle is damaged due to their negligence. Again, check with your agent.

If personal property in my car is stolen, my car insurance will cover it.

Your auto insurance only covers your car and not any property inside of it. Your homeowner insurance will generally cover this lose, subject to a deductable, of course.

To cover myself in any car I drive, I have to purchase non-owners insurance.

Auto insurance is meant to cover anything that you do in a car. The car isn’t going to be in court if a lawsuit is filed from a car accident. It will be you. Therefore, the auto policy generally will provide coverage for the policy holder when they are driving other people’s cars. This is not always the case though - have your agent go over your policy details with you.

If I don’t list my teen on my policy, I won’t be held liable if they get in an accident.

Parents will always be responsible for their children until they are of legal age. An auto insurance policy for your teen drivers doesn’t make you liable (because you already are), but gives you an option for paying for that liability that won’t break the bank.

Written by top insurance agent Mike Hills from Lutz, FL