Car insurance can feel like a mystery wrapped in confusing paperwork. Everyone seems to have an opinion on it, from your parents to your friends to that random guy on the internet. The problem is, a lot of what people think they know about insurance is just plain wrong. These myths get passed around so often that they start to sound like facts, leading drivers to make bad decisions that can cost them a lot of money or leave them unprotected when they need it most. It is like trying to play a video game where half the instructions in the manual are made up. To be a smart driver and a savvy consumer, you have to be able to separate the myths from the reality. Let's bust some of the most common and persistent car insurance myths so you can navigate the road with confidence.
Myth 1: Red Cars Cost More to Insure
This is probably the most famous car insurance myth of all time. The idea is that a flashy red car is a magnet for police attention and encourages speeding, so insurance companies charge more for them. It sounds logical, but it is completely false. When an insurance company calculates your rate, they couldn't care less if your car is fire-engine red, sunshine yellow, or boring beige. What they actually care about is the car's make, model, year, engine size, body type, and repair costs. A red sports car will cost more to insure than a red sedan, but it is because it is a sports car, not because it is red.
Myth 2: "Full Coverage" Covers Everything
The term "full coverage" is something people use all the time, but it is not an official insurance product. It is just shorthand for a policy that includes liability, collision, and comprehensive coverage. While that combination protects you from a lot of things, it definitely does not cover everything. For example, it usually does not cover the cost of a rental car while yours is in the shop or the cost of roadside assistance if you get a flat tire. Those are separate add-ons. It also does not cover your personal belongings if they are stolen from your car; that is a job for your renters or homeowners insurance.
Myth 3: My Insurance Covers Me If I Let a Friend Drive My Car
Most of the time, your car insurance follows the car, not the driver. This means if you let your friend borrow your car to run to the store and they get into an accident, your insurance policy is the one that has to pay for the damages. This is called "permissive use." However, this can be a risky move. If your friend causes a major accident, the claim goes on your policy, and your rates could go up as a result. Also, if the friend lives with you or drives your car regularly, they need to be officially listed on your policy.
Myth 4: My Insurance Will Pay for Any Car Repairs I Need
This is a common and costly misunderstanding. Car insurance is designed to cover damage from sudden and accidental events, like a crash, a hailstorm, or a fire. It is not a maintenance plan. If your engine breaks down from old age, your brakes wear out, or your transmission fails, you are on your own. The cost of routine maintenance and mechanical failures comes out of your pocket. Insurance is there for the unexpected, not the inevitable.
Myth 5: Older Cars Don't Need Comprehensive and Collision
While it is true that you might not need the same level of protection for an old beater as you would for a brand-new car, dropping all coverage isn't always the smart move. The decision should be based on your financial situation. If your ten-year-old car gets totaled and you can easily afford to buy another one with cash from your savings, then dropping collision coverage makes sense. But if that old car is your only way to get to school and work, and you couldn't afford a replacement, keeping the coverage might be worth the peace of mind.
Myth 6: My Rates Will Automatically Go Down When I Turn 25
Turning 25 is often seen as a magical milestone for car insurance rates, but it is not an automatic discount day. While it is true that age is a major factor in pricing, rates tend to drop gradually over time as you build a longer history of safe driving. A 25-year-old with a clean record will pay less than a 19-year-old, but a 25-year-old with two speeding tickets and an accident will pay a fortune. Your driving behavior matters far more than the number of candles on your birthday cake.
Myth 7: I Should Always Go with the Cheapest Quote
Shopping for the lowest price is tempting, but the cheapest policy is often cheap for a reason. It might have very low liability limits that wouldn't be enough to cover a serious accident, leaving you to pay the rest out of pocket. It could also have a massive deductible that you can't afford, or it might be from a company with terrible customer service that will make filing a claim a nightmare. You need to compare policies based on value, not just price.
Myth 8: My Credit Score Has Nothing to Do with My Insurance
This seems unfair to a lot of people, but in most states, it is a fact. Insurance companies have found a statistical correlation showing that people with lower credit scores tend to file more claims. Because of this, they use your credit history as one of the factors to determine your risk level and set your premium. Building good credit by paying your bills on time can actually help you save money on your car insurance.
Myth 9: A Small Accident is Better Handled Off the Books
If you have a minor fender bender, it can seem smart to just exchange some cash with the other driver and avoid calling the insurance companies. This is a very risky strategy. The other person could take your money and then file a claim anyway. Or, what looks like a tiny scratch could hide thousands of dollars in hidden damage. Without an official report, you have no proof of what happened or what you agreed to.
Myth 10: My Personal Policy Covers Me for Food Delivery Driving
If you decide to make some extra cash driving for a food delivery app, do not assume your personal auto insurance has you covered. The moment you are using your car for business purposes, your personal policy is likely void. If you get into an accident while on a delivery, your claim could be denied, leaving you responsible for everything. You need to get a specific commercial or rideshare policy add-on to be properly protected.
