It’s summertime and you have been swimming all day with your friends. As you get ready to jump back in the pool, Mom calls out, “Not so fast. You need to wait 30 minutes after eating before going back in the pool to prevent cramping.” If only the internet was around, and you could have fact-checked Mom to find out this is a myth.
Myths are funny things, which from unchecked information being passed on by word of mouth or even more popular, social media. They are not necessarily malicious, but information just failed to be verified for accuracy. Most of the myths we believe we learned from our parents and then pass them on to our families turning misinformation into family lore.
The car insurance world is no different. It is riddled with misinformation regarding car insurance myths, what it covers, how it works behind the scenes, etc.
In our other blog “Common Car Insurance Myths” we uncovered car insurance myths about red cars costing more to insure, your credit score doesn’t affect your car insurance rate, older drivers pay more for car insurance, your insurance covers you if you drive someone else’s car, and full coverage means everything is covered.
Well buckle up! We have more car insurance myths to uncover to help you make the right decisions when it comes to car insurance giving you peace of mind.
Car Insurance Myth 1: If Your Car is Totaled, Your Insurance Company will Automatically Pay Off Your Entire Loan Balance.
No, your insurance company will not automatically pay off your entire loan balance if your car is totaled. This is a hard lesson learned. Imagine this: You purchase your first new car off the lot and are happily driving around when someone runs a stop sign and crashes into you. Thank goodness you are ok but at the point of impact, the vehicle’s firewall is compromised, and the insurance adjuster determines the car is totaled. Insurance companies pay the car's Actual Cash Value (ACV), which is usually less than the amount you owe on your loan. This is because cars depreciate over time, especially newer cars. You may actually need to pay the difference from the car’s ACV and what you owe on the loan. There is good news; however, by purchasing relatively inexpensive gap insurance, it will cover the difference or the gap, between the insurance payout and what you owe on your loan.
Car Insurance Myth 2: Your Personal Auto Insurance Covers Any Business Use of Your Car, Even if You are Self-employed.
The answer is “it depends.” Personal car insurance covers private passenger vehicles and typically covers the use of your car for personal reasons like running errands, driving to and from work, school, and so on. Nowadays there are several different definitions regarding business use of your car.
Let’s say you are a driver for a rideshare or food/package delivery company. You will need to disclose this to your car insurance company as well as have the minimum coverage the rideshare or delivery company requires. Many car insurance companies offer rideshare endorsements to cover you while you are driving your car for business purposes.
Before you start driving your personal vehicle for a job, research what car insurance you need to carry to ensure you are fully covered and not left holding the bag. Your car insurance claim could be denied if you are using your personal car for business or commercial reasons and are not carrying the correct insurance.
Car Insurance Myth 3: Your Car Insurance will Cover Weather Damage (Like Hail), Vandalism, Fire, Falling objects, Damage by Falling Tree Limbs, Flooding, etc.
You are driving around like any other day when all of the sudden the skies open up in a tremendous thunderstorm and your car is pelted with golf-ball sized hailstones. You cringe as you imagine the potential dents your car is receiving after being hit with hail traveling somewhere between 25 and 40 mph. The storm subsides and you now wonder, “Will my car insurance cover this damage?”
The answer is yes, IF you have comprehensive car insurance coverage. Comprehensive coverage covers damage and loss not caused by a collision. Think about it like “other than collision” insurance. “How do you find out if you have comprehensive car insurance?” Well, that’s easy, check your car insurance policy declaration statement or contact your insurance agent to find more information.
Car Insurance Myth 4: Since Car Insurance Usually Goes with the Vehicle and not the Driver, You Don’t Need to Add Your Newly Licensed Teenage Driver to Your Car Insurance Policy.
It’s an exciting, and nail-biting, time to have a teenage driver in your household. With a pass of the road test at the DMV, suddenly you go from being their personal chauffeur driving them around town to having them run errands for you.
Although car insurance usually is attached to the vehicle itself, generally car insurance companies require all licensed drivers within the family unit and living in the household to be on the policy. This doesn’t necessarily mean your brother visiting from Pennsylvania for the week and borrowing your car needs to be on your policy, but it does mean your newly licensed teenage driver does.
Verify with your car insurance agent your company’s policies and procedures for teenagers possessing a driver’s license learner’s permit as well as a Class E driver’s license. Also, while you are at it, ask about what to do if they go away to college and still possess a license but are not living at home with you most of the time.
Car Insurance Myth 5: Older Cards Don’t Need Collision or Comprehensive Coverage.
Well, there are older cars and then there are vintage cars. It all depends on your car and the value of repairing or replacing your vehicle. Florida state law requires at a minimum you carry Personal Injury Protection (PIP) and Property Damage Liability (PDL) automobile insurance. This insurance requirement covers medical expenses from a motor vehicle injury and covers damage to another person’s property caused by you or someone else driving your insured vehicle.
By having collision and comprehensive car insurance you also cover the cost of repairs or replacement for your vehicle as a result of a crash as well as any “non-collision” incidents like theft, fire, vandalism, or a coconut falling off the palm tree and cracking your windshield.
The amount of collision and comprehensive coverage you choose would be determined during a discussion with your car insurance agent and will depend on many factors such as the age of the car, the value of your car, and what safety features your vehicle has. Just because your car isn’t the newest one on the market and has a few years under its belt, doesn’t mean it doesn’t deserve all the love of full car insurance coverage.
Avoid any bumps in the road with expert help from The Windward Insurance Agency.
We are here to help you navigate the best car insurance options for you and your family. We will provide you with excellent customer service and happily answer your questions regarding these car insurance myths and any other insurance related myths you may have. We will be your fact-checker and can help you dispel any car insurance myths you’ve been told.
Whether you're insuring a new (or old) car, just purchased a motorcycle, or have a college kid renting their first apartment, our goal is to make sure you’re fully informed and adequately protected.
Reach out to us today to review your coverage needs and see how we can help you save while ensuring comprehensive protection. Get started with an online quote or call us at (866) 231-2433.
