There are some things that people may think they know or have heard about car insurance that they believe to be true that are actually common misconceptions. Rumors are easy to start and spread like wildfire if they make even the slightest bit of sense and it holds true even for topics like car insurance. We have gather ten misconceptions that we hear most often in the industry and are here to dispel these falsehoods (not listed in any particular order).

  1. Florida is a “No-fault” state, so the accident wasn’t my fault!

No fault does not mean that an accident wasn’t your fault but rather that your insurance company will pay for medical expenses and lost wages, regardless of which party involved caused the accident. This allows for any party involved to receive medical care without worrying about expenses. Insurance companies will determine “fault” based off of police reports to determine the responsible party for repairs to property that was damaged during the accident. If you are determined at fault for an accident that means your insurance is responsible for paying for the damage – up to your coverage level. Past that, you are responsible.

  1. Having a red car will increase my insurance rate.

This is one of the biggest myths about car insurance and we have no idea where or how it was started.

Premiums are affected by the driver’s driving record, their credit score, the make and model of vehicle, particularly the safety features it is equipped with and how much repairs typically cost for such a vehicle. The color of the vehicle isn’t actually considered.

  1. The more expensive the car, the more expensive the premium.

Premiums are determined by a number of factors and although the make and model of your car is requested, it may not be why you think. Insurance carriers determine how much it would cost them to repair or replace your particular model by looking at industry standard pricing and past claims.

Certain vehicles, like the 1996 Honda Accord (National Insurance Crime Bureau, 2014), are more commonly stolen because they don’t stand out as much on the road and as a result hold more claims for replacement which can lead to having higher comprehensive coverage premiums as a result.

  1. Insurance companies can cancel my insurance whenever they want.

There are some reasons where an insurance carrier is justified in canceling a policy, such as non-payment of premiums or fraud but state regulations prevent you from being dropped from coverage without valid ground to do so.

  1. If someone borrows my car, their insurance covers them while driving.

Car insurance follows the vehicle, not the driver, so make sure that any friend or relative driving your vehicle is adequately insured. This is why most insurance carriers require all eligible drivers living in the same home to be on the policy – because it is common for someone to borrow (or “borrow” if you have a rebellious teenager) the car of someone they live with.

  1. The belongings in my car are covered by my car insurance.

Only the vehicle and its passengers may be insured by the car insurance policy. Personal items like cell phones, laptops, instruments, strollers, etc. are not covered even if they stored in the vehicle and damaged during an accident. These types of belongings are to be filed under personal property insurance under your homeowner’s or renter’s policy.

  1. My car insurance covers the personal and business use of my car.

If you listed your vehicle for personal use only on your car insurance policy and drive it to transport business goods or for business purposes you may invalidate your coverage. You must list your vehicle properly according to its intended use. If you have a separate vehicle for business use but may occasionally use your personal car for business, it is in your best interest to list it for both possible uses.

  1. If my car is totaled, my car insurance will pay it off.

Car insurance pay up to the fair market value of your vehicle. Fair market value is the original cost of your vehicle minus its depreciation. This amount could be less than what you still owe on your vehicle and if that is the case then you would be responsible for paying off the difference.

GAP insurance is something to consider if you don’t already have it. GAP insurance helps pay the difference between the remaining loan amount and the fair market value that your car insurance pays.

  1. I don’t need comprehensive coverage, it’s just a way for insurance companies to squeeze more money out of me.

Comprehensive coverage is not required to be purchased in the State of Florida. That said, however, it still holds numerous benefits should you end up needing the coverage. Comprehensive coverage includes protection against vehicle theft, damaged caused by a collision with an animal, road debris, or falling tree limb. It can also protect against damage caused by severe weather conditions like the hurricanes Florida is no stranger to experiencing.

  1. Buying directly from the insurance carrier is cheaper than using an agent.

An agent who is approved to sell insurance from multiple options can actually help you get better rates. The more companies you can compare premiums with, the better chance you have at getting yourself a better rate.