5 Car Insurance Myths Americans Actually Believe

Myth # 1: Drivers of Red Cars Must Shell Out More Money for Auto Insurance

Car insurers establish how much you need to pay for auto insurance based on the age of the car, the normal wear and tear, model, year, body type, safety measures, and engine size. Color does not influence the insurance premium. However, a whopping 44 percent of Americans and 53 percent Millennials firmly believe that a red car costs more than any other car to insure because it tends to be pulled over more frequently by the police.

Insurers won’t even ask you anything about the color of your vehicle when they want to give you a quote. We don’t know how this myth started but it might have something to do with the fact that certain car colors DO attract drivers more prone to traffic violations.

Myth # 2: Insurance Does Not Cover Car Repairs

Thirty-six percent of Americans incorrectly believe that insurance does not pay for repairs if they are to blame for the car crash. Interestingly, 20 percent of Americans believe this myth even when they are not at fault for the accident. We don’t know how this misconception has become so widespread, but it might be caused by a common confusion regarding the various types of car insurance.

For instance, liability insurance only covers the damaged caused to the other driver’s car when you are at fault for the accident. It doesn’t cover the repairs to your own car. If the other driver is at fault and carries a liability insurance, his insurers will pay for the repairs to your car but not for his.

Liability insurance is now the default type of insurance in nearly every U.S. state, but drivers can get collision insurance, which will cover the repairs to your car as well even when you are at fault for the car crash.

Myth # 3: Car Insurance Covers Stolen Goods

Thirty-four percent of Americans believe that their car insurance will cover for the goods stolen from their vehicles or for a stolen car. This misconception is the most common among older car drivers (aged 65 or older). However, only home insurance covers stolen goods and not all goods. They must be worth more than the homeowners insurance deductible. For instance, if a $1,500 designer bag was stolen from your car and the deductible is $500, the insurer will give you back $1,000.

This myth started probably because some car insurers might cover stolen goods, but in very rare cases. Check with your auto insurance company to stay on the safe side.

Myth # 4: Personal Auto Insurance Includes Business Use of the Vehicle

Many people wrongly believe that their personal car insurance will have their back even when they use their car for business use. Business use of a car is covered only by a separate type of insurance: business vehicle insurance. So, if you or your employees use your personal car for business purposes buy this insurance as well. Also, make sure that your employees do not use the car for personal purposes as well since business insurance won’t cover it.

Myth # 5: 1. No-fault Car Insurance means It’s Not My Fault!

Many Americans are confused about the no-fault system of car insurance. No-fault insurance does not mean that you need not to be at fault for the accident to get coverage.  It will cover medical expenses and lost wages for both parties even when one of them is at fault. Afterward, drivers’ insurers will decide which car insurance company is going to cover these medical costs and lost wages ultimately, based on who’s at fault.

As a result, the driver who caused the wreck and his auto insurer will ultimately have to foot the bill. If you are at fault and need to repair your car, you can ask your insurer to pay for it only if you have collision insurance, which is optional in most states. No-fault refers to medical bills and lost wages, rather than who’s at fault for the accident.

The confusion might come from the fact that no-fault insurance regulations are hard to navigate by non-lawyers. So, if you live in a no-fault state and have been injured in a car crash, make sure that you recover ALL your medical expenses and lost income by hiring a personal injury attorney, as car insurance companies tend to downplay the severity of car crashes and personal harm to get away with as little as they can when they foot the bills.

Fortunately, most personal injury attorneys won’t charge you unless they solve your case. They work on the so-called contingency basis like this lawyer here and the first consultation is usually free. It is best to let a professional handle your case especially when outrageous medical bills are involved.

We are happy to present this collaborative post to offer valuable information to our readers.

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