The name “comprehensive coverage” is a bit of a misnomer, as this coverage specifically covers damage unrelated to a car accident. This could include damage from natural disasters, falling objects, vandalism and theft. Collision coverage must be added separately. According to Insurify’s survey, 78% of drivers falsely believe comprehensive coverage will pay for damage sustained by their vehicle in a collision.
(Credit: anekoho/Adobe Stock)
Myth #2:
Bodily injury liability covers a policyholder’s own medical bills.
Fact:
Bodily injury liability coverage only applies if the insured driver is found to be at-fault in an accident in which the other involved driver is injured. Personal injury protection (PIP) applies regardless of fault and will cover injuries to the insured driver and their passengers. Fifty-two percent of drivers admitted to Insurify that they falsely thought bodily injury liability coverage would cover their own medical expenses in an at-fault accident.
While plenty of factors go into underwriting auto insurance – like a person’s driving history, location, the make and model of their vehicle and its age – the color of a vehicle isn’t a factor in how premiums are rated. According to Insurify, 36% of surveyed drivers said they believed the color of their vehicle affected their auto insurance rate.
(Credit: CARLOSRAMOS/Adobe Stock)
Myth #4:
There’s no way to pay less for insurance.
Fact:
Thankfully, there are plenty of insurance discounts available to help offset costly premiums. These discounts range from savings due to low mileage, to discounts for bundling home and auto policies to discounts for being a member of the military. Many still aren’t taking advantage of these discounts, Insurify says, and one-third of policyholders are either unaware of potential discounts or just haven’t utilized them.
Shopping for insurance is confusing, slow and stressful.
Fact:
Rates can vary wildly from insurer-to-insurer. As such, comparison platforms are often the most efficient way to acquire quotes from multiple companies. Eighty-four percent of those surveyed told Insurify they believe these comparison websites can help them save money and, according to the report, shoppers who use these sites can save up to $996 a year on their auto policies.
(Credit: Kmpzzz/Shutterstock.com)
Auto insurance can be downright baffling for consumers, and according to research from Forbes Advisor, 40% of insureds believe they have coverage in their auto policy that doesn’t actually exist.
From collision coverage, to deductibles, to PIP and everything in between, these confusing terms can easily jumble an insured’s understanding of their policy. Outside of those who enter the insurance space professionally, many people never bother to learn much about insurance terminology or how a policy is constructed, which leaves the burden on agents to ensure their clients are fully aware of the scope of their coverage.
In another deep-dive into the world of auto insurance confusion, insurance comparison platform Insurify recently published “The 5 Biggest Car Insurance Myths: What Most Americans Get Wrong About Their Policies,” for which over 1,000 U.S. drivers were surveyed at the end of 2021. Drivers from all 50 states and all age demographics over age 18 were included in the survey.
In the slideshow above, we’ll break down the findings of Insurify’s survey to see just how much Americans know about their auto policies, and debunk some common insurance myths.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.
