Auto insurance can be confusing, and misinformation often leads drivers to make costly mistakes when choosing coverage. At AL-GA Insurance, we believe in educating our customers so they can make informed decisions. Here are some of the most common auto insurance myths—and the truth behind them.
1. “Red Cars Cost More to Insure.”
🚗 Myth: Many believe that driving a red car will automatically increase insurance rates.
✅ Truth: Insurance companies do not base premiums on the color of your car. Instead, factors like make, model, age, engine size, safety features, and your driving history impact your rate. So, if you love red, go for it—it won’t cost you extra!
Many people assume that red cars are associated with speeding tickets and reckless driving, but insurers focus on statistical risk rather than color preference. Whether your car is red, black, or white, your premium is more influenced by how safely you drive and the type of vehicle you own.
2. “Your Insurance Covers Everything.”
🚗 Myth: Some assume that having auto insurance means all damages are covered.
✅ Truth: Policies vary—liability insurance covers damages to others, but not your own vehicle. To protect against theft, vandalism, natural disasters, or accidents, you need comprehensive and collision coverage. Always review your policy details to know exactly what’s covered.
Some drivers assume that because they pay for insurance, they are protected from any kind of financial loss. However, policies are written with specific coverage limits and exclusions. If you only have liability insurance, damages to your own vehicle won’t be covered in an accident. Understanding the difference between full coverage and basic liability can prevent unexpected financial burdens.
3. “Personal Auto Insurance Covers Business Use.”
🚗 Myth: If you use your personal vehicle for work-related tasks, it’s automatically covered.
✅ Truth: Standard policies may not cover accidents that occur while using your car for business purposes. If you’re making deliveries, driving clients, or using your car for work beyond commuting, you may need a commercial auto policy for full protection.
Using your car for ridesharing services like Uber or Lyft, delivering food, or transporting work-related materials could leave you unprotected under a standard auto policy. If an accident happens while using your vehicle for business purposes, your claim could be denied. Investing in a commercial policy ensures proper coverage.
4. “Your Credit Score Doesn’t Affect Your Insurance Rate.”
🚗 Myth: Many think credit has nothing to do with car insurance costs.
✅ Truth: In many states, insurers use credit-based insurance scores to determine rates. A lower credit score could lead to higher premiums, as insurers see it as a potential indicator of risk. Improving your credit score can help lower your insurance costs over time.
Insurance companies use historical data that suggests drivers with lower credit scores file more claims. While this practice varies by state, maintaining good credit can help you save money on auto insurance in the long run.
5. “Older Drivers Always Pay More.”
🚗 Myth: Age automatically leads to higher insurance costs.
✅ Truth: While younger, inexperienced drivers typically face higher rates, older drivers with a clean record can often qualify for discounts and lower premiums. Additionally, many insurers offer senior discounts and defensive driving course savings for experienced drivers.
Insurance rates are often highest for teen drivers due to their inexperience. However, as drivers gain experience and maintain good driving records, they can benefit from reduced rates. Many insurance providers also offer mature driver discounts and incentives for taking refresher courses.
6. “Your Insurance Follows the Driver, Not the Car.”
🚗 Myth: If you let a friend borrow your car, their insurance will cover an accident.
✅ Truth: Auto insurance follows the car first. If someone borrows your car and causes an accident, your insurance is usually the primary coverage. This means you could be responsible for any damages before their insurance kicks in.
Many people assume that if they let a friend or family member drive their car, that person’s insurance will take full responsibility in case of an accident. However, most policies specify that the owner’s coverage applies first. If the driver’s policy does come into play, it will generally serve as secondary coverage.
7. “If Another Driver Causes an Accident, Their Insurance Will Pay Immediately.”
🚗 Myth: The at-fault driver’s insurance will handle all damages quickly.
✅ Truth: The claims process can take time. If the other driver is uninsured or underinsured, you might have to rely on your uninsured/underinsured motorist coverage to cover expenses. This is why having the right coverage matters.
Even in clear-cut cases where another driver is at fault, their insurance company may dispute liability, delay payments, or offer lower settlements than expected. Having uninsured/underinsured motorist coverage ensures that you won’t be left struggling financially while waiting for a payout.
8. “Minimum Coverage is Enough.”
🚗 Myth: Carrying the state-required minimum insurance provides complete protection.
✅ Truth: Minimum liability insurance may not fully cover the cost of medical bills or vehicle repairs after an accident. Higher coverage limits offer better financial protection, ensuring you’re not left paying out of pocket after an accident.
Many drivers choose the lowest required coverage to save money, but this can backfire in a serious accident. If the cost of medical expenses or vehicle repairs exceeds your policy limits, you may have to pay the difference out of pocket. Opting for higher coverage limits and considering add-ons like comprehensive and collision insurance can offer better financial security. Read more on minimum coverage here.
Get the Right Coverage with AL-GA Insurance
At AL-GA Insurance, we’re dedicated to helping you separate fact from fiction and find the right policy for your needs. Whether you need liability, comprehensive, collision, or uninsured motorist coverage, we partner with top providers like Progressive, National General, and Clearcover to offer you the best rates.
📍 Visit us at 4404 20th Ave, Valley, AL
📞 Call us at 334-578-ALGA(2542)
Stay informed, stay protected! 🚘💙
No responses yet