The popular auto insurance myths your clients believe

The popular auto insurance myths your clients believe | Insurance Business America

The popular auto insurance myths your clients believe
Owners of red cars are charged higher insurance rates – a statement which, according to 42% of Americans, is true even though it isn’t.

That is just one of many popular auto insurance-related myths unearthed by in a nationwide telephonic survey.

According to the survey, the belief that owners of red cars pay more tax is spread over a wide demographic. 53% of people who believe it are millennials, 44% are college graduates and 36% have an annual salary exceeding $75,000.

A less common misconception is that car insurance pays for items which have been stolen from a vehicle – 34% of Americans think so. But, in reality, such losses are covered by homeowners and renters insurance.

Laura Adams, an analyst at InsuranceQuotes, said that most people learn about the nuances of car insurance only when they claim it, and most millennials have never had the opportunity to.

1 in 5 Americans believe that insurance won’t cover repair costs when the accident is their fault.

Even though auto insurance policies vary from state to state, the three main benefits of liability, comprehensive and collision remain the same. Comprehensive and collision benefits cover the loss incurred by the policyholder in case of an accident.

The survey also found that many people aren’t fully aware of the factors which affect insurance rates.

For example, 17% of survey participants didn’t know that where they live matters. People in small towns pay lower rates than those in big cities.

Adams recommends people to consult with their insurance agent once a year to learn about new policies and other benefits.

"These results indicate that millions of Americans need a refresher on what insurance does and does not cover," she said. "It doesn't hurt just to pick up your phone and talk to your company or agent."

The survey was conducted in August by Princeton Survey Research Associates and has an error margin of plus or minus 3.6%.