Myth 1: A red car costs more to insure
Fact: The color of your car has no effect on your insurance premium.
Your rates are instead determined by factors like the vehicle’s make, model, safety features, cost of repairs, and the driver’s history.
Your rates are instead determined by factors like the vehicle’s make, model, safety features, cost of repairs, and the driver’s history.
Myth 2: If someone borrows your car, their insurance pays for an accident
Fact: In Indiana and most other states, insurance coverage follows the vehicle, not the driver. If you lend your car to a friend and they cause an accident, your insurance will be the primary coverage for any damages.
Myth 3: State minimum liability coverage is all you need
Fact: The minimum amount of liability coverage required by law is often not enough to cover the high costs of a severe accident. Indiana, a “fault” state, requires drivers to carry a minimum of $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $25,000 for property damage. If you are at fault for a crash with costs that exceed these amounts, you will have to pay the rest out-of-pocket.
Myth 4: “Full coverage” covers everything
Fact: “Full coverage” is not an official term but a general description for a policy that includes liability, collision, and comprehensive insurance. Even with these protections, your policy will not cover every possible scenario. For example, it does not cover personal belongings inside your car if they are stolen or damaged.
Myth 5: Your personal auto policy covers you for business use
Fact: If you use your personal vehicle for business purposes, such as ridesharing or deliveries, your personal insurance policy may not cover you in the event of an accident. Your insurer needs to be aware of how you use your vehicle, and you may need to purchase a commercial auto policy or a specific rideshare endorsement to be properly protected.