Auto insurance is one of those things most of us have to buy but few of us fully understand. Between state requirements, coverage types, and rate calculations, it’s no wonder myths spread quickly. Maybe you’ve heard a friend swear that red cars cost more, or that filing a “small” claim won’t change anything.
The problem is, myths like these can do real damage. Believing them can leave you underinsured, paying more than you should, or unprepared when an accident happens. At Yak Offers, we believe clarity is power — so let’s yak it out in plain English and separate fact from fiction.
Insurance isn’t exactly dinner-table conversation. It’s full of jargon, state-by-state rules, and fine print that few people read. That gap in knowledge leaves plenty of room for half-truths and guesses to spread. Add in the fact that money is on the line — and people really want to believe there’s a trick to lowering their rates — and myths can feel more believable than facts.
The truth? Insurers use a combination of data, risk calculations, and state laws to set premiums. Some factors are firmly in your control (like your driving record), while others (like your age or ZIP code) aren’t. Either way, no amount of car paint or wishful thinking will change the basics.
Fact: Color has zero impact on your rate. Insurers care about the make, model, year, repair costs, and safety features — not the paint job.
Fact: Liability insurance is still required in most states, regardless of your car’s age. And depending on repair costs, collision or comprehensive coverage may still make sense.
Fact: In many states, insurers use credit-based insurance scores when setting rates. While controversial, it’s legal in most places and can impact what you pay.
Fact: State minimums are often too low to cover the full cost of a serious accident. If damages go beyond your limit, you pay the rest out of pocket.
Fact: In most cases, insurance follows the car. If a friend borrows your vehicle and crashes, your policy may be responsible for the claim.
Fact: Insurers often raise rates after any claim, no matter the size. They look at frequency as much as cost. Sometimes it’s smarter to pay small repairs yourself.
Fact: Not always. Safety ratings, repair costs, and theft rates matter more. Some luxury cars cost less to insure than common models with higher claim histories.
Now that we’ve busted some of the biggest myths, here’s what really moves the needle on your premium:
Summary / TakeawayAuto insurance doesn’t have to be confusing — but believing myths can cost you. Car color won’t raise your rates, minimum coverage isn’t always enough, and yes, even small claims can affect your premium. By knowing the facts, you’ll save money, reduce stress, and choose coverage that actually fits your life.This article is for informational purposes only and does not constitute financial advice. Please consult a licensed insurance professional for guidance specific to your situation.Sources:
No — car color has no impact on your insurance rates. What matters are things like your driving record, age, and vehicle type.
Insurance can feel complicated, and word-of-mouth “advice” spreads fast. Many myths come from half-truths that sound believable but don’t reflect how insurers actually set rates.
Compare multiple quotes, review your coverage levels, and make sure you’re not paying for coverage you don’t need.
Not necessarily. Cheaper policies may leave you underinsured. Balance affordability with the protection you realistically need.
Typically your driving record, location, type of car, mileage, and coverage levels. These have far more impact than any myth.
