3 Myths About Car Insurance - NYCM Insurance Blog

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Mar 15, 2019

3 Myths About Car Insurance

Picking the right car insurance provider is an important decision if you want to make sure you’re getting the best rates and coverage for your family and your vehicle. So when making your decision, make sure you’ve gotten all the information! There are a lot of myths when it comes to insurance and you can’t make the best decision without accurate information. 

Here are some common myths we’ve debunked for you. 

MYTH #1: Truly no one is at fault with no-fault insurance.  

The words “no-fault” in insurance may make it sound like no matter who ran that stop sign or damaged their bumper from distracted driving, everyone makes out the same. That’s not exactly true, nor does it absolve the responsible driver from their role in causing an accident. 

“No fault” -- also known as Personal Injury Protection Insurance (or PIP) -- only ensures (within the parameters of your plan) that everyone in your car is covered for hospital and medical expenses, income loss, and other injury related expenses. 

MYTH #2: The color of your car affects your insurance rate (and red cars are more
expensive to insure!)

Insurance companies are generally uninterested in the color of your vehicle. However, the year, make and model of your car can significantly impact your rates, in addition to other safety considerations like how well your particular make/model of car performed in a crash test. 

MYTH #3: Your insurance will cover your loan if your car is totaled. 

This is a tricky one. 

If your car is damaged and determined a “total loss,” you will receive payment for the value of the car, not the outstanding balance on your loan. In other words, if you owe $15,000 on your car and an accident results in a total loss, the car will be evaluated on its value at the time it was totaled. If it’s worth $12,000, that’s what you’ll receive, leaving the difference as your responsibility. That is, unless you have gap insurance, which some insurance companies offer. 

If you have other questions about insurance talk to your local agent for personalized advice.