Not everyone is an expert on car insurance. But misinformation can be dangerous.
In fact, auto insurance myths can be expensive. They can prevent you from saving money, or even cost you extra.
Here are some of the most common myths on the subject that need to be debunked:
- If you loan your car to someone, their insurance will cover damages. This is true in some states, but it's not typical. Usually, the car-owner's policy will be the primary policy, and the driver's car insurance won't kick in unless the owner's limits are exceeded.
- Soldiers will tend to pay more for insurance. The exact opposite is true. In fact, many insurers offer discounts for people in the service. Some people seem to think that the inherent danger of military life will bump their auto insurance rate. But, if you're not driving your car into a combat zone, then this theory doesn't make much sense.
- The minimum legal coverage will protect you from theft, vandalism and falling trees. The legal minimum only mandates liability coverage. Comprehensive and collision, which are optional, will do the rest.
- Older drivers tend to pay more for insurance. Senior citizens enjoy a broader range of discounts than most of us do. Retirees usually get discounts because they spend less time in their cars. The AARP also offers accident prevention courses that can lower insurance rates for seniors. And states might offer unique discounts that are age dependent.
- Personal insurance will cover business-use. Personal auto insurance only covers business-use of your vehicle up to a point — and only if you keep your insurer informed. If you're making deliveries in your car every day, you need to talk to your insurer about getting commercial auto protection. Sometimes the line can be blurry. If you pick up a package for the office on your way to work and you get into an accident, you should be covered. But don't expect to be protected if you are using your car for business reasons beyond a limited allowance.
There are plenty of other myths we could cover, but these ones often result in people losing out on discounts — or even going without insurance. Avoiding them can help you stay protected at an appropriate level, for an appropriate price.