True or False? I Bought "Full Coverage" So My Car Insurance Will Pay for Everything — Even a Rental Car — if I Get Into an Accident

Progressive, the third largest auto insurance group in the U.S., exposes some common car insurance myths and reveals the truth behind each

MAYFIELD VILLAGE, Ohio.— Do your eyes glaze over, your palms start to sweat and your heart begin to race whenever you have to deal with car insurance — whether you’re filing a claim after a crash or simply renewing or making changes to your policy? These kinds of reactions are understandable — after all, car insurance is complicated. The good news? You’re not alone, according to The Progressive Group of Insurance Companies.

“Insurance is tricky stuff,” said Chuck Crist, claims manager, Progressive. “It’s generally not something people have to think about or deal with every day. And, what makes it even more complicated is the fact that there’s a lot of misinformation floating around out there. We want to highlight some of the more common car insurance ’urban myths’ to help people understand the facts behind each. The more informed you are, the better choices you can make when it comes to shopping for, buying and owning car insurance.”

The following is a sampling of some common myths Progressive’s more than 13,000 claims people have heard over the years and the facts behind each:

* Myth: I bought “full coverage” so everything’s paid for, including my rental car.
Fact: There is no such thing as “full coverage.” In most states, liability insurance is mandatory — this covers the amount you’re liable to pay, up to the dollar limits you select when you buy a policy, for an accident in which there is damage or injury to other vehicles, property or people. There are also optional physical damage coverages like comprehensive and collision; comprehensive generally covers weather-related damage (hail, etc.) as well as theft claims, while collision generally covers crashes you’re involved in with objects other than animals. And then there are coverages like rental reimbursement which pays for the cost of a rental car if your personal car is in the shop as a result of an accident. Long and short: there are lots of coverage options out there. It’s best to have a good understanding of what they are and what they cover, and select the ones you want and need based on your personal situation.

* Myth: Insurance companies use information about who was ticketed as a result of a crash to determine insurance liability (which party is responsible for a crash).
Fact: Law enforcement determines who broke the law and insurance companies determine who is responsible for causing the crash. The answers to these questions are not always the same. Most insurers conduct their own independent investigations, which take into account citations and/or tickets issued by law enforcement, and use that information to help determine who is responsible for the crash based on all the facts, not just who was ticketed at the scene.

* Myth: I am required to get at least three estimates from repair shops before my vehicle can begin to be repaired following a crash.
Fact: Not necessarily. Some insurers may request that you get multiple estimates but very few actually require this. If you decide to use a shop that’s in an insurance company’s “network” of pre-approved shops you may just have to get an estimate from that one shop. And, there are some services available, like the service provided at Progressive’s local concierge claims service centers, that give you the choice of having the insurance company manage the claims/repair process for you from start to finish — all you have to do is drop off the damaged car and, within minutes, can be on your way in a rental car assured that a quality body shop will get to work repairing your car quickly and that the repairs will be guaranteed.

* Myth: My insurance premium will always increase if I’m involved in an accident.
Fact: It depends; your rate can increase, decrease and, sometimes, stay the same. When developing an auto insurance rate, insurers consider lots of information proven to be helpful in predicting someone’s likelihood of being involved in a crash, including information about drivers (age, gender and marital status), driving history (tickets and accidents), and vehicles (year, make and model). They also look at your past claims history and the claims experience for other customers like you. Following a crash, the information about the crash will be used in combination with a lot of other information about you, your car and your driving history; your rate may not always go up as a result.

* Myth: I’m always better off using a shop that can recoup my comprehensive or collision deductible for me (this is the amount I selected when I bought my policy and am required to pay first before the insurance company pays).
Fact: You always have the opportunity to choose where you want your vehicle to be repaired. Know what options are available including the services and guarantees associated with each — while recouping your deductible may sound enticing in the short term you should also think about the future. Insurance companies generally select shops to work with that are known for quality work and fast turnaround. And, if you use a shop in a company’s network, most often the work is guaranteed by the insurance company and the shop.

* Myth: I should always request that a body shop use original equipment manufacturer (OEM) parts to repair my car.
Fact: Not necessarily. Insurance is a pass-along business. This means that if expenses increase (for example, if insurers are paying out more in claims), companies may raise rates to cover higher costs. To keep the cost of insurance down, most companies write estimates using the most cost-effective solutions that will return a car to its pre-loss condition and ensure a safe, quality repair. The decision to write an estimate that may include using a mix of OEM or non-OEM parts is based on each claim, the vehicle, the availability, type and cost of parts, etc. If a non-OEM part is indicated on an estimate but you wish an OEM part to be used instead, you may have to pay the cost difference.

* Myth: If I lend my car to someone and he or she crashes my car I’ll always be covered by car insurance.
Fact: Before you lend your car out, know two things: understand your coverages and what coverages the other driver has — if you don’t have optional physical damage coverages and your friend crashes your car and he or she doesn’t have physical damage coverage either, there will be no coverage to pay for the damage to your vehicle.

* Myth: If I buy a new car my auto insurance company automatically knows about it so my new car is covered.
Fact: No. Most car insurance companies require that you notify the company or your insurance agent directly within a specified number of days, generally 30, to add the vehicle to the policy, ensuring that it’s covered.