Common myths about auto insurance

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Get the Facts on How Your Auto Insurance Rate is Determined

Learn more about what factors are considered when your insurance company sets your rate. If you are thinking about purchasing a new vehicle, consider which types may save you money on auto insurance.

Read about common myths and get the facts before purchasing auto insurance.

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There are a lot of misconceptions about auto insurance that consumers have. Below are a handful of popular auto insurance myths that are absolutely not true.

Auto Insurance for red cars cost more to insure than other shades

Color is absolutely not a factor used to calculate auto insurance rates - auto insurance companies don't even ask you what color your car is when providing an insurance quote. However, the year, make, model, body type, engine size and age of your car do factor into your rate.

One speeding ticket will make your rates skyrocket

In some states and situations, a speeding ticket can increase your rate, but in many cases, you have to get two tickets before your auto insurance rate rises. Auto Insurance Companies consider several risk factors when reviewing rates, so if your insurance rate increases, a speeding ticket may or may not be the reason.

I only need the minimum amount of auto insurance required by law

Many states do indeed have minimum auto insurance requirements, but basic auto insurance coverage may not cover all of your costs if you cause an accident that results in a lawsuit and your insurance limits don't cover all of the damages.

Auto insurance on cheaper cars costs less.

A cheaper car may actually cost more to insure if it has a large engine, weighs a lot or is an unusual model. However, comprehensive coverage (which covers damage caused by vandalism, hail, fire etc.). will indeed cost less if you own a cheaper car.

If another driver is driving my car, their auto insurance will cover them if they get in an accident

In most states, the auto insurance policy covering the vehicle is considered the primary insurance, which means that the auto insurance company for the vehicle must pay for damages caused by an accident. Policies and laws differ by state, and you should become familiar with these differences when allowing another driver to drive your car.

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