A recent report found that many Americans are holding on to some misconceptions when it comes to car insurance.
Among the most widely believed misconceptions is that car color has an impact on one’s auto insurance rate. Roughly 44% of Americans think this is true.
The lack of knowledge about auto insurance may be due in part to financial illiteracy. Unfortunately, this lack of financial knowledge may be keeping some consumers from getting the best auto insurance coverage.
Here are four more things to know about car insurance:
1. Car insurance covers repairs for an at-fault driver
Car insurance does pay for repairs even if you are the one who caused the accident. The report found that just 56% of respondents were able to answer this questions correctly when asked whether car insurance would cover an at-fault driver. Most of the respondents who got the question wrong were millennials.
2. Where you live affects your insurance rates
Many respondents had no idea that their location has an impact on how much they will ultimately pay for their car insurance. Approximately 17% of survey participants were not aware of this fact.
3. Car insurance does not pay for mechanical problems
If you experience any mechanical trouble with your car, you’re out of luck. Your auto insurance company will not pick up the tab. Surprisingly, 14% of those who participated in the survey thought they would be covered if their car had any mechanical issues.
4. Car insurance does not cover items stolen from your car
About 34% of respondents wrongly believed that belongings stolen from their car would be covered by auto insurance.