When purchasing an auto policy, it’s important to understand the factors that affect your policy costs and coverage. Unfortunately, there are a lot of insurance myths that pass for “common wisdom”—here, we will separate the myths from facts.
Insurance Myth #1 – I don’t have to worry because I have full coverage.
The term “full coverage” can lend to a variety of variables in coverage limits and add on coverages. For example, you might be surprised to learn that not all “full coverage” policies include emergency roadside assistance or rental car coverage. These coverages are optional and often left out by online insurance quoting tools as they add to your monthly cost.
Insurance Myth #2 – Your credit has no effect on your insurance rate.
Your credit-based insurance score—which is derived from your credit history—may matter. A good credit score demonstrates how well you manage your financial affairs and has been shown to be a good predictor of whether someone is more likely to file an insurance claim so many insurance companies take it into consideration when you want to purchase, change or renew your auto insurance coverage. People with good credit—and therefore good insurance scores—often end up paying less for insurance.
Insurance Myth #3 – I have 30 days to notify my insurance company when I buy a new car.
Typically, you have 14 days to notify your insurance agent or carrier after you purchase a new vehicle. However, this drops to 4 days if you do not currently carry comprehensive damage coverage on another insured car. Additionally, policies can vary in their requirements so if you are considering purchasing a new vehicle it’s a wise idea to reach out to your agent to discuss.
Insurance Myth #4 – Any property stolen from my car or damaged in an accident is covered.
Generally, auto insurance will not cover property that is stolen from your car or damaged in the event of an accident. This can be a very expensive misunderstanding! However, if you have a homeowner or renter policy, these policies will probably cover the items after your deductible is paid. Your auto insurance will cover the replacement of glass or other repairs that are incurred due to the break-in, after your deductible is met.
Insurance Myth #5 – Insurance will cover all medical bills if I am injured in an accident.
The short answer is not always and not indefinitely! Auto insurance policies usually have a standard Personal Injury Protection (PIP) and the option to carry more PIP coverage. This is where it pays to talk to an insurance agent vs buying your policy online as online, you’ll get the least number of coverages as those platforms are focused on price first.
PIP insurance coverage is limited to “reasonable and necessary” medical expenses incurred within two years of an accident, up to your PIP limit. If you have medical insurance, it will generally not kick in to provide coverage until your PIP coverage is exhausted.
Insurance Myth #6 – I will still have insurance coverage if I pay my bill late.
Sorry, but most policies only have a small “grace period” for you to make payment on your insurance coverage after the due date. If your payment is missed or late beyond this grace period, your policy will be cancelled based on those terms. It’s a good idea to setup auto pay on your insurance policies to avoid missing a payment. However, if you are in a hardship and can’t make your payment on time. You need to reach out to your agent and/or insurance carrier to discuss your options.
Insurance Myth #7 – I must take my car to the repair shop my insurance company recommends.
In Oregon, an insurance company cannot legally force you to use a particular repair shop. Some carriers might ask you to take your car to a certain shop that they contract with to diagnose the necessary repairs, however, you can ultimately have the repairs evaluated or done at the shop of your choice.
Insurance Myth #8 – If another person drives your car, in the event of accident, their auto insurance will cover the damages.
In most states, the auto insurance policy covering the vehicle is considered the primary insurance. This means that the car owner’s insurance company must pay for damages caused by an accident, regardless of who is driving. Policies and laws differ by state, so make sure you understand the rules before allowing another person to drive your car.
Insurance Myth #9 – The insurance company has to pay for new factory parts to fix my car.
Actually, they don’t. Insurance companies can opt for aftermarket or recycled parts instead of new. Oregon law requires that aftermarket parts be certified equivalent to factory parts by and independent testing facility. In 2022, we continue to see a lack of specific factory parts, especially when it comes to electronic components.
Insurance Myth #10 – Personal auto insurance also covers business use of your car.
If you are self-employed and use your vehicle for business purposes, personal auto insurance may not protect you. Click here to learn more about Personal Vehicles for Business use.
In conclusion, it will always be to your benefit to work with an independent insurance agency like Bancorp Insurance. Online insurance quoting tools are typically geared around price and while you might think you understand and can answer all their questions to get comprehensive coverage, the fact is there is a lot in an insurance policy that they don’t ask about. An independent insurance agent knows what to ask you and knows what coverages to recommend based on your budget and needs. They can help to explain various aspects of coverage to you that you might not think that you need.
Bancorp’s insurance experts are available to provide you with a free review and consultation. Contact Us – Bancorp Insurance Call 800-452-6826
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents.