Car insurance is one of those things most people have—but few fully understand. Between commercials, secondhand advice, and outdated assumptions, it’s no surprise that several myths still surround how auto insurance actually works.
Believing the wrong information could cost you money or leave you underinsured. Let’s break down some of the most common car insurance myths and the truth behind them.
Myth #1: Red Cars Cost More to Insure
Truth: The color of your car doesn’t affect your premium. Insurers look at factors like the make, model, engine size, your driving history, and where you live—not the paint job.
So, feel free to choose that red sports car—it won’t raise your rate just because it’s red.
Myth #2: Your Rates Automatically Drop at Age 25
Truth: While age is a factor, your rate won’t magically decrease the moment you turn 25. What really matters is your driving record, claims history, and credit score. Safe drivers of any age can earn lower premiums over time.
Myth #3: Full Coverage Means Everything is Covered
Truth: “Full coverage” usually includes liability, comprehensive, and collision—but it doesn’t mean “all possible damages.” It often excludes:
- Mechanical breakdowns
- Personal belongings inside the car
- Rental reimbursement (unless added)
Always read your policy details carefully.
Myth #4: If Someone Else Crashes Your Car, Their Insurance Pays
Truth: In most cases, car insurance follows the car, not the driver. So, if a friend borrows your car and crashes, it’s likely your insurance that will be on the hook.
Myth #5: Older Cars Don’t Need Insurance
Truth: While you might skip optional coverage like collision or comprehensive on an older car, liability insurance is still required in most places by law—no matter how old your vehicle is.
Myth #6: Your Insurance Covers Everything in the Car
Truth: Personal belongings (like laptops, phones, or tools) stolen from your car are not covered under your auto insurance—they’re usually covered under your homeowners or renters policy.
Myth #7: Minimum Coverage Is Enough
Truth: Legally, it might be—but minimum coverage often doesn’t go far if you’re in a serious accident. If you cause major injuries or damages, you could still face out-of-pocket costs or lawsuits. More coverage means more protection.
Myth #8: Filing a Claim Always Raises Your Rates
Truth: Not necessarily. Some insurers offer accident forgiveness, and small claims or not-at-fault incidents may not affect your premium. But filing multiple claims in a short time can raise your rates.
Myth #9: You Can Cancel Anytime Without Penalty
Truth: You can cancel, but depending on your policy, you may face cancellation fees or losing a loyalty discount. Also, a lapse in coverage—even for one day—can impact future premiums.
Final Thoughts: Know the Facts, Save on Coverage
Understanding the truth behind car insurance myths can help you make smarter decisions, save money, and avoid surprises when you need your policy the most.
Don’t let outdated beliefs steer your insurance choices—drive with confidence by knowing exactly how your coverage works.