Car Insurance: Five Misconceptions You Need to Know

Having low-cost insurance is beneficial, but in order to save money and time, you have to understand the specifics of your policy. When you’re unaware of the car insurance coverages included in your policy, you could end up spending more instead of saving on your cheap auto insurance. Read the following five common auto insurance misconceptions that mislead many policyholders.

I automatically have “full coverage” in my policy.

Although many people tend to think that a car insurance policy already includes complete coverage, in reality there are a number of options that you need to select specifically. You’ll have to decide if you’d like to include coverage for items stored in your vehicle, low deductible, automatic rental car refund after an accident, or protection against theft and car damages among others.

In fact, the “full coverage” package only includes collision, comprehensive and liability coverages. It’s important that you learn about add-ons offered by your insurer to gain protection for the numerous possible accidents drivers could encounter.

I automatically have rental car reimbursement coverage.

Rental car reimbursement coverage comes in handy when your car isn’t drivable after an accident, and you need to use a rental car temporarily until your car gets repaired. Many drivers assume that a policy instantly covers rental costs. However, this is yet another misguided notion since purchasing rental car reimbursement coverage is an option. If you want to add this coverage to your policy, be sure to ask about it when buying auto insurance.

I’m not at fault in the accident I was involved in.

It’s never an easy decision to determine who exactly is at fault in an accident. To get a full understanding of what occured, an insurance company sends a claims adjuster whose responsibility is to conduct a thorough investigation of a reported accident. Once you’ve filed a claim, the adjuster will gather as much information as possible by asking you and any witnesses relevant questions.

After all things are evaluated meticulously, the adjuster will then decide whether you’re at fault or not. If the adjuster finds you to be at fault, then he/she will help you understand your options. If you’re not at fault, then the adjuster may give you a settlement offer.

I’m not responsible for any damages to my car since I wasn’t the one driving it.

When you lend your vehicle to another driver and an accident occurs, then the responsibility still rests with you. Why so? Car insurance helps protect you in circumstances involving your vehicle. This basically means that the policy attached to the car will cover the damages or loss in the event of an accident, regardless of the person driving the vehicle. Thus, even if you’re not the one driving your car, as long as you give verbal or written consent to the driver, then you’ll still be responsible for any damages incurred.

I’ll receive full payment for my car if it gets totaled in an accident.

As there are various factors taken into account when calculating the reimbursement amount, it’s sometimes impossible to refund the full cost of a vehicle. Factors such as market changes and depreciation affect the final amount that you’ll receive. When your vehicle gets totaled in an accident, your insurance payout may not be the exact amount you originally paid for the car. The claims adjuster sent by your insurer will research and assess the appropriate replacement cost of your vehicle.

It’s always a good idea to study your policy carefully when buying insurance. This way, you can make a more informed decision, and you’ll know what particular coverages are included in your policy. You can compare your options and check rates from Ask your insurance agent about coverages that you can add to your car policy.

Dennis Gilroy is an insurance agent who blogs in his spare time. Ensuring customers have the information to make informed decisions is important to him.

Vijayraj Reddy
Vijayraj Reddy is founder & editor-in-chief of, a financial blog which helps people to earn money, invest money and save money. You can find him on Facebook & Twitter or send him email at [email protected]

Share This Post


Related Articles

Leave a Reply

CommentLuv badge
© Copright 2013 | Privacy Policy | Terms of use | Advertise | Contact