What You Don’t Know About Car Insurance Could Cost You Money
A recent report from InsuranceQuotes.com found that many Americans are holding on to some misconceptions when it comes to car insurance. Among the most widely believed misconceptions is that car color has an impact on one’s auto insurance rate. Roughly 44% of Americans think this is true.
“These results indicate that millions of Americans need a refresher on what insurance does and does not cover. A lot of people will be pleasantly surprised to learn their car insurance covers all types of accidents and their homeowners or renters insurance policy covers theft,” said Laura Adams, InsuranceQuotes.com’s senior analyst.
- Roughly 53% of millennials believe car color has an impacts one’s car insurance rate. Education and household income do not play a role in whether or not someone believes this myth. Approximately 45% of college graduates and 42% of Americans with an annual household income of $75,000 or more both thought this myth was a fact.
- 1 in 5 Americans thought that car repairs are not covered even if the driver was not at fault for the accident.
- About 34% of respondents wrongly believed that belongings stolen from their car would be covered by auto insurance.
The lack of knowledge about auto insurance may be due in part to financial illiteracy. Unfortunately, this lack of financial knowledge may be keeping some consumers from getting the best auto insurance coverage.
Three things to know about car insurance:
1. Car insurance covers repairs for an at-fault driver
Car insurance does pay for repairs even if you are the one who caused the accident. The InsuranceQuotes report found that just 56% of respondents were able to answer this questions correctly when asked whether car insurance would cover an at-fault driver. Most of the respondents who got the question wrong were millennials.
“Liability insurance, required for driving in nearly every state, covers damage you cause to someone else’s car or other property as well as medical costs for injuries when you’re at fault in an accident. Collision insurance, which is optional, covers damage to your own car, even if the accident was your fault,” said InsuranceQuotes researcher Allie Johnson.
2. Where you live affects your insurance rates
Many respondents had no idea that their location has an impact on how much they will ultimately pay for their car insurance. Approximately 17% of survey participants were not aware of this fact.
3. Car insurance does not pay for mechanical problems
If you experience any mechanical trouble with your car, you’re out of luck. Your auto insurance company will not pick up the tab. Surprisingly, 14% of those who participated in the survey thought they would be covered if their car had any mechanical issues.