Hello! I'm Dan Lyles with Lyles Insurance. And in this video we're going to go over ten of the most common heard auto insurance myths and lies. These are things you probably hear from family and friends. A lot of things that are believed to be true that aren't. We're going to go over ten of the most common.
Number 1: Having Comprehensive coverage means I have everything. You can have Comprehensive coverage and still have a lousy policy. Comprehensive is really a term I don't like because it's misleading. The Comprehensive coverage only represents one of five major parts of your auto insurance policy. What it does it covers you for physical damage to your vehicle for anything other than a collision (such as theft, fire, vandalism, hail, hitting a deer, things like that).
And just like the last slide: Full coverage means I have everything covered on my policy. Not true! Full coverage is another misleading term. You can have full coverage and still have a lousy policy. Again, full coverage only represents two of the five major parts of an auto insurance policy. But what people mean by having full coverage is simply physical damage coverage on their vehicle, which includes both Comprehensive and Collision coverage.
Number 3: If someone borrows my car and wrecks their policy will cover it. That is not true. Auto insurance policies always follow the vehicle, not the driver. So whenever there's an accident, the owner of the vehicle, their insurance is the one it's going to cover it. Now, when someone borrows your vehicle they're covered on your policy under what's known as “permissive use”.
Number 4: “I have full coverage on any vehicle I drive”. Let me tell you. This is hogwash! Because no such auto insurance policy exists. If they did they'd go bankrupt, if they covered any vehicle you drive with Comprehensive and Collision coverage. The only vehicles that you have physical damage coverage for are the ones that are listed on your policy that you have chose to take out Comprehensive and Collision coverage. So don't believe anybody when they say “I have full coverage on any car I drive”. It's not true.
Number 5: My policy automatically covers my teenage kids on our vehicles. What I'm talking about here are when kids turn 16 and 17 and get their license, and they're still living with their parents. The parents need to add those kids as drivers onto their auto insurance policy. Or sometimes it might work out to where they take out a separate second policy. Sometimes that will help save on the cost, because it is expensive for a 16 or 17 year old. But because of that, a lot of people try to cheat the system and leave the kids off the policy. Let me tell you. I've seen a lot of people have some heartache over that. So just understand that there's ways you can save money and still play by the rules without trying to cheat the system. If you think you're going to cheat the system and get away with it, you're taking a big risk at landing in some hot water.
Number 6: Shopping around for auto insurance hurts my credit score. Now, I understand why people believe this because if you go shopping around applying for credit cards, that certainly does hurt your credit score. But with auto insurance, it's simply not true. It's a completely different way of running credit that doesn't affect your credit score. There is no way an auto insurance company checks credit and negatively applies to your credit rating.
Number 7: Having state minimum liability coverage is all you need. Let me tell you, state minimum liability coverage sucks! It's only good for minor accidents. If you cause a severe accident, especially one where somebody or multiple people are severely injured, state minimum liability is not going to come close to covering part of it. And also, if you hit an expensive vehicle, or damage a house, or damage multiple vehicles, the state minimum liability in property damage could fall short as well. So don't believe that state minimum liability coverage is all you need. It may be all you need to drive legally, but it doesn't cover you adequately.
Number 8: If I loan my car to someone and they crash, my rates will not go up. Well, let me tell you, if your rates don't go up after someone crashes your vehicle, you're very very lucky. Most of you are going to see an increase. Not right away but when your policy expires, you'll see that
increase likely on a renewal offer. And if you think you're just going to shop around and fly under the radar with another company, that's not going to happen either. Because MVR’s are not the only thing auto insurance companies check. True, someone else's crash isn't going to show up on your motor vehicle report (or driving record), but companies also check what's called CLUE reports. Which is an insurance claim history type thing. It's going to be on there. And so don't think you're likely to fly under the radar, or not get an increase if someone borrows your car and has an accident.
Number 9: Auto insurance costs more on red colored vehicles. This one is just plain silly! I don't know where this comes from. But the color of a vehicle has no effect on auto insurance rates.
And finally, Number 10: If I get a ticket from out of state it won't hurt my driving record (it won't show up). That used to be true at one time. But today, it's getting less and less likely. About 95% of you are going to see an out-of-state ticket show up on your resident state driving record.
I hope you've enjoyed this video and learned something in the process. If you'd like to learn more about auto insurance please visit my blog. I have hundreds of articles posted. I posted the link here on this slide. Thank you and have a great day!
Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..