It’s summertime and you have been swimming all day with your friends. As you get ready to jump back in the pool, Mom calls out, “Not so fast. You need to wait 30 minutes after eating before going back in the pool to prevent cramping.” If only the internet was around, and you could have fact-checked Mom to find out this long‑standing warning is actually a myth.
Myths are funny things, often created from unchecked information passed along through word of mouth or, more commonly today, social media. They aren’t usually malicious — just repeated without anyone verifying whether they’re true. Many of the myths we believe are learned from our parents, and we pass them on to our families, turning misinformation into family lore.
The car insurance world is no different. It’s riddled with misconceptions about coverage, claims, and how insurance companies operate behind the scenes.
Buckle up as we uncover car insurance myths to help you make the right decisions when it comes to car insurance, giving you peace of mind.
Car Insurance Myth 1: If Your Car is Totaled, Your Insurance Company will Automatically Pay Off Your Entire Loan Balance.
No, your insurance company will not automatically pay off your entire loan balance if your car is totaled. This is a hard lesson many drivers learn too late. Imagine this: You purchase your first new car off the lot and are happily driving around when someone runs a stop sign and crashes into you Thankfully, you’re okay, but the vehicle’s firewall is compromised, and the insurance adjuster determines the car is totaled.
Insurance companies pay the vehicle’s Actual Cash Value (ACV) — not the amount you owe on your loan. Because new cars lose about 20% of their value within the first year of ownership, the ACV is often less than the loan balance.
This means you may need to pay the difference out of pocket. The good news? Gap insurance covers the difference between the ACV and your remaining loan balance, protecting you from a major financial hit.
Car Insurance Myth 2: Your Personal Auto Insurance Covers Any Business Use of Your Car, Even if You are Self-employed.
The answer is “it depends.” Personal car insurance covers private passenger vehicles and typically covers the use of your car for personal reasons like running errands, driving to and from work, school, and so on. But today, “business use” can mean many things.
Let’s say you are a driver for a rideshare or food/package delivery company. You will need to disclose this to your car insurance company, as well as have the minimum coverage the rideshare or delivery company requires. Many insurers now offer rideshare endorsements to cover the gap between personal and commercial use.
Before using your personal vehicle for work, confirm what coverage you need. Claims can be denied if you’re using your car for business without the proper insurance — a costly mistake for many gig‑economy drivers.
Car Insurance Myth 3: Your Car Insurance will Cover Weather Damage (Like Hail), Vandalism, Fire, Falling objects, Damage by Falling Tree Limbs, Flooding, etc.
You’re driving around like any other day when suddenly the skies open up in a tremendous thunderstorm and your car is pelted with golf-ball sized hailstones. You cringe imagining the dents your car is receiving after being hit with hail, traveling somewhere between 25 and 40 mph. The storm subsides and you now wonder, “Will my car insurance cover this damage?”
The answer is yes — but only if you have comprehensive car insurance coverage. Comprehensive coverage covers damage and loss not caused by a collision.
Comprehensive insurance covers damage not caused by a collision, including:
- Hail
- Flooding
- Fire
- Theft
- Vandalism
- Falling tree limbs or debris
Weather‑related claims are extremely common — in fact, an average of 245,000 car insurance claims are filed each year for hail alone.
To confirm whether you have comprehensive coverage, check your policy declarations page or contact your insurance agent.
Car Insurance Myth 4: Since Car Insurance Usually Follows the Vehicle, You Don’t Need to Add Your Newly Licensed Teenage Driver to Your Car Insurance Policy.
It’s an exciting — and nerve‑wracking — time when a teenager gets their license. One day you’re their personal chauffeur, and the next they’re running errands for you.
While insurance typically follows the vehicle, most insurers require all licensed household drivers to be listed on the policy, including newly licensed teens. Your brother visiting from Pennsylvania for a week doesn’t need to be added, but your teen absolutely does.
According to the CDC, teen drivers are statistically high‑risk. Drivers ages 16–19 are nearly three times more likely to be involved in a fatal crash than drivers over 20 — which is why insurers require them to be disclosed.
Ask your agent about:
- Adding teens with learner’s permits
- What happens when they leave for college
- Available discounts (good student, driver training, telematics, etc.)
Car Insurance Myth 5: Older Cards Don’t Need Collision or Comprehensive Coverage.
There are older cars… and then there are vintage cars. Whether you need collision or comprehensive coverage depends on the vehicle’s value and your financial comfort level.
Florida law requires all drivers to carry:
- Personal Injury Protection (PIP)
- Property Damage Liability (PDL)
This insurance requirement covers medical expenses from a motor vehicle injury and covers damage to another person’s property caused by you or someone else driving your insured vehicle.
Even if your car isn’t new, repairs after a crash typically average more than $1,000, so dropping coverage may cost more than it saves.
The amount of collision and comprehensive coverage you choose would be determined during a discussion with your car insurance agent and will depend on many factors such as the age of the car, the value of your car, and what safety features your vehicle has. Just because your car isn’t the newest one on the market and has a few years under its belt, doesn’t mean it shouldn’t receive all the love from full car insurance coverage.
Avoid Bumps in the Road With Expert Help from The Windward Insurance Agency.
We’re here to help you navigate the best car insurance options for you and your family. Our team provides exceptional customer service, answers your questions, and helps you separate fact from fiction when it comes to car insurance myths.
Whether you're insuring a new (or old) car, just purchased a motorcycle, or have a college kid renting their first apartment, our goal is to make sure you’re fully informed and adequately protected.
Reach out today to review your coverage needs and discover how we can help you save while staying fully protected. Get started with an online quote or call us at (866) 231-2433.
