5 Common Insurance Myths Debunked

Insurance Myths Debunked

Misinformation in the insurance field is not uncommon. When purchasing an auto insurance policy, it is necessary to understand the real factors that affect your premium. Today we debunk 5 common insurance myths you may hear to help you get the best value for your car insurance budget.

Myth 1 – Vehicle color equals higher insurance rates.

Or generally, colder colors determine your car insurance premium. The truth is, the color of your car does not factor into your auto insurance costs. Make, model, year, body type, engine size, age of vehicle, and safety features though, are taken into consideration.

Myth 2 – If your friend drives your car, their car insurance will cover the damages in the event of an accident.

Auto policies typically follow the vehicle regardless of who is driving. Even when your friend is driving, the claim may still come under your policy as the primary insurance coverage on the vehicle.

Myth 3 – Comprehensive insurance covers everything.

Comprehensive insurance protects your car against damages like vandalism, fires, rockslides, but not damages resulting from a collision or from theft.

Myth 4 – Car insurance covers items stolen from your car.

Your car insurance won’t cover items stolen from your car. Your homeowners or renters insurance policy may cover that. You should consult with your agent immediately once you find that someone has broken into your car.

Myth 5 – Thieves prefer newer cars vs. older cars.

Car thieves usually steal in order to strip the car and sell its parts for money. It is easier for them to sell those parts to repair shops than selling the car itself. They prefer older cars’ spare parts which are popular in the market.

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About Dale Williams

Dale Q. Williams, MBA, is a well-respected financial executive whose experience spans from insurance to investment banking. Dale has first hand underwriting experience through working for one of the largest U.S. based insurance carriers, and advisory experience from working for several bulge-bracket and middle-market investment banks. Dale also received his MBA from University of Chicago Booth School of Business, with concentrations in finance and accounting.