Rob Mitchell-Shelter Insurance

There are a lot of pseudo-experts out there who tell you what your car insurance covers—your dad, your sister, your boyfriend, and your boss. But the truth is, a lot of people just don’t know what they’re talking about because they keep spreading false information. Lets debunke 10 myths about car insurance.

 • This is completely false. Each state has different requirements for drivers, but they all require that driver’s carry at least liability insurance.

2. Red cars cost more to insure

• False. The color of your car plays absolutely no role in the cost of your insurance premiums. Insurance companies often don’t even ask what color your car is.

3. I have insurance, so if my car is damaged in any way, I’m covered.

• This is only true if you have liability, collision and comprehensive insurance. Comprehensive car insurance covers damage to your car in the event of hail, scratches, run-ins with wildlife and other unexpected events.

4. If someone breaks into my car and steals my stuff, my car insurance will cover it.

• False. Even comprehensive car insurance does not cover your personal belongings in most cases. Your homeowner’s or renter’s insurance policies, however, will typically cover items stolen from your car.

5. Thieves steal expensive new cars

• False. The most commonly stolen vehicles are not only among the most common cars, but are also among the oldest. The 2007 National Insurance Crime Bureau list of most commonly stolen cars included the 1995 Honda Civic, 1991 Honda Accord, and 1989 Toyota Camry.

6. If my car is totaled, my insurance will pay off my loan.

• False. Comprehensive and collision insurance will pay the value of your car before the crash minus your deductible. If you owe more on the car than it was worth because of depreciation, you will have to pay the remaining balance after the insurance check is cut to you.

7. My insurance covers me if I’m the victim of a hit-and-run accident.

• This is only true in certain cases. Sometimes, insurance will pay out of a collision policy for this. Otherwise, you need to be certain you have uninsured motorist coverage. When someone hits you and drives off, it’s assumed they have no coverage. Your policy, as long as you have paid for uninsured motorist coverage, will pay for damages to your vehicle, usually minus your deductible.

8. People with flashy cars get more traffic tickets and have higher premiums.

• Statistically, it’s not actually the flashiest cars that get stopped the most. According to a 2009 Quality Planning study, the drivers who get the most tickets are those behind the wheels of Hummer H2/H3. Others include drivers of Scions, Mercedes-Benz, some Toyotas, the Subaru Outback station wagon and the Audi A4.

9. My friend’s insurance will cover damages to my car if my friend crashes it

• False. Your car is your responsibility, though your friend’s insurance may cover expenses beyond what your insurance will.

10. The government sets limits on insurance rates.

• False. Each state establishes regulations that guide how much insurers can charge, but does not set limits or prices.