Insurance company debunks some of the myths surrounding insurance

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Car color does not influence the cost of auto insurance; despite popular belief, factors like make, model, safety record, and driver profile are what determine your rate.
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Older and experienced drivers typically pay lower premiums, and those over age 55 can access special discounts.
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Comprehensive coverage and the right liability limits are essential for full protection, debunking myths about minimum coverage and assumed inclusivity for theft or natural disasters.
Auto insurance has emerged as a major inflation driver and a persistent pain point for consumers, as rates continue to climb and some companies pull out of climate-prone states. Mercury Insurance, based in California, recently called out some persistent myths, saying the more consumers know how insurance works, the better off theyll be.
Theres a lot of misinformation out there when it comes to auto insurance, said Justin Yoshizawa, director of Product Management State for Mercury Insurance. We want to help consumers separate fact from fiction so they can make smart, informed decisions when shopping for coverage.
Among the most pervasive myths debunked by Mercury Insurance is the mistaken belief that a cars color influences insurance costs. Despite long-standing rumors, whether a vehicle is a flashy red or a muted white, color plays no role in how insurers determine premiums.
Instead, rates are calculated using more meaningful information such as the vehicles make, model, safety record, and likelihood of theft, alongside the drivers age, driving history, and sometimes credit background.
Older drivers often pay less, not more
Age is another misunderstood factor. Contrary to the myth that premiums rise as drivers grow older, Mercury Insurance maintains that rates typically decrease with experience, with drivers in their mid-50s often enjoying the best prices.
Seniors may see premiums increase later in life, but can access discounts, such as those for drivers over 55 who complete approved accident prevention courses. Retirees and part-time drivers, who log fewer miles, are also frequently eligible for lower rates.
Mercury also addressed the influence of credit scores on auto insurance rates. A drivers credit-based insurance score, derived from their credit history, can affect premiums, as its considered a solid indicator of claims risk. Those with strong credit often pay less.
Another widely held misconception is that comprehensive coverage is included or that basic insurance will always cover events like theft, vandalism, or natural disasters. In reality, only drivers who opt for both comprehensive and collision coverage are fully protected from these risks. Consumers are urged to assess whether the additional coverage is worth the investment based on their cars value.
Liability coverage
Relying solely on state-mandated minimum liability coverage also poses risks. Mercury Insurance and industry experts recommend drivers opt for more substantial liability protectionas much as $100,000 per person and $300,000 per accidentto avoid significant out-of-pocket expenses after a major collision. People with considerable assets are advised to consider an umbrella policy for additional security.
Further, insurance follows the car, not the drivera fact that disproves the idea that a friends policy will cover your car if they are involved in a crash. Generally, its the car owners policy that pays, though state laws vary.
Lastly, business use of a personal car is typically not covered by personal auto insurance. Those using their vehicles for work or sharing them with employees should secure commercial vehicle insurance.
Posted: 2025-07-16 11:12:05