Auto insurance is a legal requirement in most countries, but it’s also one of the most misunderstood financial products. Many people pay more than they should or take unnecessary risks because of common myths. In this article, we debunk the most popular auto insurance myths that could be costing you money or coverage.
Myth 1: The Color of Your Car Affects Your Insurance Premium
🚫 Not True
Many people believe red cars cost more to insure because they’re considered “fast” or “sporty.” In reality, insurance companies don’t care about the color. They consider:
- Vehicle make and model
- Engine size
- Safety features
- Theft rate
- Your driving record, location, and claims history
Myth 2: Older Cars Don’t Need Comprehensive Coverage
⚠️ Depends on the Car’s Value
While older cars may not need full coverage, skipping comprehensive and collision insurance could cost you if:
- The vehicle is still valuable
- You can’t afford to replace it out of pocket
- You live in an area prone to theft or natural disasters
Always compare the cost of coverage vs. the car’s value before making a decision.
Myth 3: Your Insurance Covers Everything in an Accident
❌ Only to a Limit
Standard policies often exclude:
- Personal belongings inside the car
- Rideshare use (like Uber or Careem)
- Mechanical breakdowns
- Intentional damage
Know your policy limits and exclusions. You might need add-ons or riders for full protection.
Myth 4: Premiums Go Up Automatically After Every Accident
🟡 Not Always
Not all accidents increase your premium. Some insurers offer:
- Accident forgiveness
- Lower impact for minor incidents
- Discounts for maintaining a clean record afterward
However, at-fault accidents or multiple claims in a short time can raise rates significantly.
Myth 5: Minimum Legal Coverage Is Enough
⚠️ Risky Thinking
The legal minimum usually covers only third-party liability. If your car is damaged, stolen, or destroyed, you’ll have to pay out of pocket unless you have:
- Collision coverage
- Comprehensive coverage
- Uninsured/underinsured motorist coverage
Going beyond the minimum provides real financial protection.
Myth 6: Personal Auto Insurance Covers Business Use
❌ Not Always
If you use your vehicle for deliveries, ride-sharing, or other business purposes, your personal auto policy may not cover you in case of an accident. You may need:
- Commercial auto insurance
- A business-use rider on your current policy
Conclusion
Believing in auto insurance myths can cost you money, leave you underinsured, or cause problems when filing claims. Educate yourself, read the fine print, and ask your insurance provider the right questions. Informed drivers make smarter — and safer — decisions on the road.
Leave a Reply