Common Auto Insurance Myths and Misconceptions

There are many myths on the web about the insurance industry. Which cars are more expensive to insure? Can you get cheaper rates by driving a smaller vehicle? The list goes on and on. Let us break down some of these myths, respond to some of the common misconceptions about car insurance, and reveal the truth about your auto insurance coverage.

Red cars are the most expensive to insure.

False: Color does not affect the rate of your insurance. What is taken into consideration is the make, model, body type, engine size, year and of course the driver’s information. This widespread “fact” is actually a myth. 

Small cars are always the cheapest to insure.

False: The size of a vehicle is a factor for insurance rates, smaller is not necessarily better. Smaller cars usually sustain more damage, and people driving them sometimes sustain greater injuries during an accident. Therefore, the cheapest to insure may be something like a mid-sized SUV. It’s still a small vehicle but may be more durable than a car. 

Thieves steal new cars most often. 

False: An older car may have fewer security measures, making it easier to break into, and the thief can earn more money to sell an older car for parts. Theft is also frequently a product of location. Is your car parked behind a locked or monitored gate? Do you park in a garage or on the street? Keep a close eye on the safety of your vehicle, regardless of your car’s age.

A personal auto insurance policy always covers me while I'm operating my own auto for business purposes.

False: Your personal coverage is designed to provide coverage while you are driving for leisure, personal reasons, or when you are commuting to and from work. If you regularly operate your vehicle for job-related reasons, (hauling supplies, meeting with clients, etc…) then you may need separate commercial auto insurance.

Personal finances do not affect insurance rates.

False: Although your insurer does not care how much money is in the bank, your coverage premium could be based on your history of managing your finances. Some insurers have found that low credit scores are associated with a higher risk of claims and a higher average claim value. For the best rates, keep a close watch on your credit score.

As long as I have at least the state-minimum insurance coverage, I am protected from personal liability in an accident.

False: Believing that liability can fully protect you could be the most costly auto insurance myth of all. Each state establishes a minimum amount of liability coverage that each driver must have. Though minimum coverage satisfies state requirements, it does nothing to limit your financial liability in an accident. If, for example, you are at fault for an accident and are sued for property loss and bodily injuries, you are still on the hook for any judgment or settlement not covered by your insurance policy.

I have "full coverage" insurance. I'm covered for any circumstance.

False: One of the most important things you can do is find out the types of events your insurance covers. “Full coverage" is a frequently used term, but full coverage is not an actual type of coverage. So while you may have liability, collision, and comprehensive protection, your policy may be lacking in other types of coverage, such as uninsured motorist protection, reimbursement for emergency roadside assistance, or rental cars.

Letting my coverage lapse will save me money. 

False: Initially, going a few months without insurance will keep you from having to pay premiums and can save you money. However, when you reinstate your policy, your rate could go up significantly due to that lapse, which would just make your premium higher than it was before the lapse. You could also get a ticket...or worse! What would happen if you get into an accident with no insurance? Taking such a risk could end up costing you, so we don’t recommend it.


Don’t fall for these myths! Some of these common auto insurance misconceptions hold many people back from getting the coverage they need. Never make assumptions about your auto insurance coverage without first contacting your agent. What you don't know — or what you incorrectly assume — could end up costing you hundreds or thousands of dollars. Talk to one of our friendly agents at 1-800-INFINITY to ask any questions and verify any rumors you may have heard about insurance coverage. Give us a call today. 1-800-INFINITY.


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