Understanding car insurance can be one of the most confusing parts of owning a car. In August, the website InsuranceQuotes.com conducted a survey of 1,000 adults to find out what misconceptions about car insurance have stuck.

So, here are the most commonly-believed false statements about car insurance (and their explanations):

Myth #1: Red cars are more costly to insure.

On the survey, 44 percent of people believed that this is true. However, it is not. This idea likely comes from the popularity of the color red when it comes to sports cars. Car color has no impact on car insurance rates.

Myth #2: Insurance doesn’t cover you if you are at fault for a crash.

Of those surveyed, 37 percent (including more than half of the 18- to 29-year-old category) believed that car insurance does no good if you are the cause of a wreck.

Liability insurance, required in most states (including Minnesota), covers damage you might cause to someone else’s car or property, plus medical costs for injuries when you are at fault. Collision insurance, an optional type of insurance, covers damage to your own car, even when the accident was your fault. So if you have collision insurance, you’re covered.

Myth #3: You’re only paid the value of scrap metal when your vehicle is totaled.

Car insurance pays the market value of your car before a crash, but 28 percent of survey participants believed that insurance companies will only pay the value of the post-crash scrap. But in reality, some policies even cover the cost of replacing your car new, rather than the value of your car at the time of a crash.

Myth #4: Your auto coverage includes items stolen from your car.

A large portion of survey respondents (34 percent) think that car insurance covers personal belongings stolen from their car. However, this type of loss is actually covered by their homeowner’s or renter’s insurance policy.

Myth $5: Your car insurance carrier pays for mechanical repairs.

Unfortunately, 14 percent of people are under the impression that car insurance covers mechanical breakdowns. Mechanical breakdowns are among the things not covered by auto insurance.


If you have questions about insurance coverage and what you’re paying for with your policy, talk to your insurance agent. Make sure to ask plenty of questions when you aren’t sure about what’s covered, so you know what you can expect when it’s time to use it.
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Tags: Insurance