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Auto insurance myths are quite common in this day and age. We'll look at four of the most common myths that surround car insurance and what the truth actually is. Some of these things may surprise you, but take heart because at least now you'll know the truth and won't be put in jeopardy in the future because of a lack of knowledge.

Myth #1: The Color of Your Car – Many people think that red cars will trigger a higher insurance premium. This is not necessarily the case. In days past, red and yellow cars tended to create a bit of a premium from some insurance providers, but this is not true across the board. In modern days, insurance companies will often not tack on any premiums or penalties based on the color of the vehicle being insured. The case could be made that brightly colored vehicles are even more safe then there dull colored counterparts. Insurance companies are more concerned about the driver's track record for auto accidents and speeding tickets than they are about the color of the car being insured.Auto Insurance Myths

Myth #2: Thieves Only Steal New Cars – It should be noted that the majority of cars stolen are older vehicles. In fact, when looking at the total list of stolen cars, the vast majority are not new cars, but rather older model domestics and imports. Do not be fooled into thinking that thieves will only go after new cars. It is quite the opposite. Car insurance companies know this and therefore the price of comprehensive coverage on older cars still tends to be expensive.

Myth #3: Auto Theft Reimbursement – Similar to the last myth, some people do not have comprehensive coverage on older vehicles because they feel like they cannot afford it. While this may be true, it must be noted that if comprehensive coverage is not selected for the vehicle then the vehicle is not covered in the case of any theft. Oftentimes people think that theft coverage comes with basic insurance policies. This is simply not the case. You must understand the difference between liability insurance and comprehensive, full coverage insurance. Theft insurance is not included with standard liability insurance.

Myth #4: Loan Payoff with a Totaled Vehicle – If you have a loan on a vehicle, and that car is totaled, the insurance company will only pay you for the value of the car itself, not what the remainder loan total is. This is a very important distinction. There exists a product in the insurance market place called gap insurance. This gap insurance is designed to take care of this exact situation when the value of the vehicle is less than the amount it cost to pay off the loan on the vehicle. You may want to consider having gap insurance for this very purpose. Do not be fooled into thinking that your insurance company will pay off your total loan if your vehicle is totaled and you do not have gap insurance.

If you have any questions about these or any other auto insurance myths, feel free to contact one of our agents. They will be happy to answer any questions you may have about auto insurance.


By Matt Reynolds - Google+
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Claude Reynolds Insurance Agency Inc.
6801 Dixie Hwy Suite 232
Louisville, KY 40258
Phone: 502-933-2255
Fax: 502-933-5057
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