The Biggest Myths About Car Insurance

The Biggest Myths About Car Insurance

Automobiles are among the most commonly used e...

Automobiles are among the most commonly used engine-powered vehicles (Photo credit: Wikipedia)

Most Americans would say they understand the world of car insurance pretty well. After all, you cannot drive a vehicle in this country without a policy. That means a majority of people over the age of eighteen either have a policy currently or did at some point in the past. It’s a necessary thing, even if that monthly payment never stops causing pain each time you write a check. But while you’ve got experience paying that statement and haggling over rates, there may be some preconceptions about various elements of insurance that are patently false. Many of these are something like urban myths, in that if enough people speak them out loud they eventually become ‘common knowledge’. But you’d be surprised to discover that some of these are actually the biggest myths about car insurance.

The first myth to make this list is the idea that if you buy a red automobile you will be forced to pay more in premiums. Many people think that a red car means the driver feels a need for speed, that he’s looking for attention and will therefore act in a more risky manner. But according to the insurance companies themselves, the color of your vehicle has absolutely nothing to do with the rate you are offered. The red car has that reckless image, but the facts that insurance providers lean on when assessing risk do not back this up. The insurance company is far more interested in the other specifics of your vehicle, such as the age, make and model.

Another myth is that you will pay more insurance for a new car because new vehicles are more likely to be stolen. That brand new car is worth more than one that’s a few years old, so obviously they would be targeted by thieves, right? In fact, according to a recent crime report the exact opposite is true. Based on data drawn from the year 2009, the majority of the most frequently stolen vehicles were models from the ’90s. The only newer cars to make the list were the ’02 Ford Explorer, the ’00 Dodge Caravan and the ’04 Dodge Ram pickup. The bottom line is these older vehicles don’t have the high tech security system of new cars, making them easier to grab. There’s also a vibrant market for used vehicle parts, since the recession economy has forced people to hang on to older vehicles longer.

You might think that your insurance payments will protect you from all sorts of automotive damage, but the reality is your list of protections is quite short. Unless you are paying for 100% comprehensive coverage, if your car is damaged by a natural disaster or vandalized you will not be compensated. Many people only purchase liability coverage, and don’t give much thought to what they are losing out on. A stolen car will not be covered in this case either, so make sure you understand the details of your policy before you just blankly accept something.

Perhaps you have a passion for sports cars, but you went another direction because you were worried about steep rates. But whether you bought your auto insurance in Florida, California or anywhere in between, there is no evidence that sports cars bring a higher insurance rate. Most people think if you drive a sports car you naturally get more speeding tickets, and therefore will pay a higher monthly premium. But there are many other vehicles that aren’t sports cars that are much more expensive to insure, such as the luxury SUVs Hummer makes, and the relatively inexpensive Scion. Insurance companies do target certain vehicles as more risky, but that determination isn’t made just because the car is considered sporty.

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