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Auto Insurance Buying Guide - 5 Common Misconceptions

Updated on December 1, 2009

Sometimes, it is really easy to assume certain things about our auto insurance and it is even easier to forget certain details about the coverage we have, but a quick evaluation of our auto insurance policy can help us to understand certain factors, so we must start with our auto insurance policy statement that explains in detail what it covers.

Besides going through our car insurance policy and statement, I have provided a list below of certain things which provides info on 5 common misconceptions about auto insurance that can help clarify some things.

Auto Insurance Buying Guide- Common Misconception #1 - You thought you have had "full coverage".

Most auto insurance buyers believe that their auto insurance policy automatically includes things like a low deductible, all-risk coverage, coverage for items stored or transported via your vehicle, protection against damage and theft to car accessories and also full car, and automatic reimbursement for another car rented after a motor vehicle collision or accident, but the truth behind this is that most of these options are to be selected and bought specifically with your auto insurance policy. In some cases, certain state laws determine types of options that an insurance company may or may not offer to their insurance buyers. Therefore, your state laws affect the type of insurance coverage you can purchase.

Auto Insurance Buying Guide - Common Misconception #2 – “You thought you had coverage for rental car reimbursement”

Unfortunately, if after buying auto insurance policy you end with an accident and your car is not in a good condition to take you to your destination, home, hospital, or office, chances are that you will have to rent one. In this emergency case, most people assume that their auto insurance policy will automatically cover up all the cost for renting a temporary car or taxi, but this is also a coverage option and you have to check whether your insurance company is providing this facility or not, so it clears the misconception that the coverage for reimbursement of a temporary rental car is something you have to ask specifically to buy with your policy and is not attached automatically.

Auto Insurance Buying Guide - Submitting Auto Insurance Claim- Common Misconception #3 – “You thought that was not your fault”

A car collision or auto accident is a very unfortunate thing, which can happen to anyone, but determining who was to blame for that collision is not an individual decision because to obtain a complete picture of how that accident occurred, your insurance company will talk to each and every individual involved in that accident, particularly you before making a decision about who was to blame. After evaluation and review of this whole process, if you are found guilty, your insurance adjustor will explain the details to better understand the different perspectives taken into account.

Auto Insurance Buying Guide - Check out car insurance policy before buying your auto insurance.
Auto Insurance Buying Guide - Check out car insurance policy before buying your auto insurance.

Auto Insurance Buying Guide - Submitting Auto Insurance Claim- Common Misconception #4 – “I was not driving my car when it was damaged. Why should I be responsible for that?

If you have lent your car to a relative or friend and that person met an accident, morally the responsibility for all the damage done to your car comes on your friend or relative, but the reality is that your car insurance policy is designed to protect you and your car. Car insurance has been designed to protect in situations involving your car. This is the most important factor why auto insurance coverage stays with the car itself.

This also means that if an insured car is destroyed or damaged or has been involved in an accident where there is damage to the car parts, the policy corresponds to the particular vehicle, not the person driving, must cover the losses. This is provided that the person driving had oral or written permission to handle these situations.

Auto Insurance Buying Guide - Submitting Auto Insurance Claim- Common Misconception #5 – “My vehicle was damaged in a collision, but the total amount of my claim payment does not cover what I have paid for my car. Why not the insurance company reimburses me everything I have paid for the car?”

The insurance company cannot reimburse your everything you have paid for your car because if your vehicle is damaged in a collision or accident, in some cases, it becomes impossible to recover the full cost of the vehicle because the payment for your claim you will receive is calculated taking into consideration market changes, depreciation, and other factors. For these reasons, payment for your car claim will not be what you have paid for it.

So it is best to evaluate and review your car insurance policy and compare it to what you assume about your car’s insurance coverage.


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    • profile image


      7 years ago

      Good hub. It's important to review your insurance coverage at least once a year with your agent to make sure you covered as you need to be when you have a claim.

    • KaisaJordan profile image


      7 years ago from Atlanta, Georgia

      Good job not having the right coverage can be expensive in time of trouble.

    • cloudrider profile image


      7 years ago from Dallas, Tx

      Great Job! Being in the insurance industry these misconceptions are so common you hear them everyday.... Don't forget if you have Liability and OTC Comp/Coll and rent a vehicle the entirety of your coverage may not transfer over dependent on your carrier....

    • soni2006 profile imageAUTHOR

      Rajinder Soni 

      9 years ago from New Delhi, India

      Thank you so much liveforjesus and Veronica for your comments.

    • Veronica Allen profile image

      Veronica Allen 

      9 years ago from Georgia

      Nicely done Sonni2006. Many times these same misconceptions have us so unprepared in the event of an accident. It's best to get the full facts before it's too late.

    • liveforjesus profile image


      9 years ago

      I think that we have all need to look at the sky, where the blessings come!!!?

      For that I promise a hub that you will like, we will have a debate.

      Thank you to divide with me your opinion.



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