Myths About Car Insurance Rates: What Really Affects Your Premium? 

Key Takeaways 

• Car color has zero impact on your insurance premium. Red cars cost exactly the same to insure as white, black, or silver ones. Insurers rate based on vehicle make, model, safety features, and loss history. 

• The auto liability insurance required by your state is often not enough to fully protect you from medical expenses or lawsuits after a serious crash. Consumer groups generally recommend much higher limits. 

• Comprehensive insurance covers non-collision events like theft and hail, while collision coverage pays for crashes. Neither one “covers everything,” and full coverage is not an official policy term. 

• Your credit history matters in 46 states. A good credit score demonstrates responsible financial affairs and can meaningfully lower your car insurance rates, while poor credit can increase them by 50% to 200%. 

• A single minor ticket does not automatically double your rate. Insurers evaluate your entire driving record, not one isolated incident.  

Why So Many Car Insurance Myths Won’t Go Away 

Many myths about car insurance rates are simply false: a red car does not automatically cost more to insure; one ticket does not always double your premium, and your price is usually based on data-driven factors instead. Common car insurance myths spread through word of mouth, social media, and outdated advice from well-meaning friends, but believing them can leave you underinsured, overpaying, or both. 

At Acceptance Insurance, we work every day with drivers across 14 states who have questions about what actually affects their auto insurance costs. Many of our customers carry non-standard policies, have a few tickets on their record, or simply need affordable coverage that fits a tight budget, especially value-conscious drivers in their 25s to 40s trying to balance real coverage needs with monthly payments. 

What actually influences your insurance premium comes down to your driving record, where you live and park, the type and age of your vehicle, how you use it, your coverage selections and limits, your claims history, and in most states, your credit-based insurance score. Below, we break down the myths drivers hear most often about car color, vehicle cost, tickets, minimum liability limits, comprehensive coverage, credit, “full coverage,” business use, and the rating factors that really determine what you pay. For a deeper dive, check out our guide on factors that affect auto insurance rates. 

Myth 1: “Red Cars and Paint Color Cost More to Insure” 

This is the most persistent of all common auto insurance myths. The idea that red cars attract higher premiums sounds logical on the surface, but it falls apart under any scrutiny. 

Insurance companies do not ask about paint color when generating a quote, and color is not encoded in your vehicle’s VIN. Underwriters evaluate year, make, model, body style, engine size, safety ratings, anti-theft features, and historical claim data for that specific vehicle. A red 2018 Honda Civic and a white 2018 Honda Civic with the same driver and coverage produce the same rate. 

The myth likely persists because people associate red with sports cars, and sports cars do tend to cost more to insure due to higher horsepower and claim frequency. But that is a vehicle-type issue, not a color issue. Insurance companies cover risk, not appearance. Choose whatever color you want without worrying about these car insurance myths. 

Myth 2: “The More Expensive the Car, the Higher the Insurance Rate” 

Many shoppers assume a higher sticker price automatically means a higher auto insurance premium. In reality, repair costs and risk profile matter more than purchase price alone. 

Insurers model expected claim costs using parts prices, labor hours, parts availability, and historical loss data for specific models. A mid-priced SUV with expensive proprietary parts and high theft rates can cost more to insure than a pricier sedan with widely available parts and excellent safety ratings. 

Safety features like automatic emergency braking, lane assist, and backup cameras reduce claim frequency, which can offset value. However, complex sensors embedded in bumpers and windshields can dramatically raise repair costs after even minor fender-benders. 

Before buying, get an insurance estimate for the specific make and model. An Acceptance Insurance agent can help you compare models and coverage options before you commit. 

Myth 3: “Any Ticket or Violation Automatically Makes Your Premium Skyrocket” 

A single speeding ticket does not automatically double your rate. Insurers look at your complete driving record over the past three to five years, not one isolated incident. 

The distinction between minor and major violations matters significantly: 

• Minor violations (5–9 mph over the limit, failure to signal) typically increase rates by about 20% to 30% for a first offense. 

• Major violations (DUI, reckless driving, hit-and-run) can double premiums or more and remain on your record for five-plus years. 

Some insurers offer forgiveness for a first minor ticket on an otherwise clean record. Safe-driver discounts can also be lost after certain claims or tickets, increasing the effective price even when the base rate stays flat. 

Drivers may also benefit from completing a state-approved accident prevention course or traffic school. Learn which infractions carry the steepest penalties in our post on common traffic violations that raise insurance rates. 

Myth 4: “State-Minimum Auto Liability Insurance Is All You Need” 

Budget-conscious drivers in states like Alabama, Texas, and Florida often assume that carrying only the minimum coverage required by law is enough. It rarely is. 

Auto liability coverage pays for other people’s bodily injury and property damage when you are at fault. It does not cover your own medical expenses, lost wages, or vehicle damage. Here is what happens when minimum limits meet a real crash: 

Scenario Detail	Cost
Totaled SUV (other party)	$45,000
ER and hospital bills (3 passengers)	$85,000
Total damages	$130,000
State minimum (25/50/25) pays out	Up to $75,000
Driver’s personal liability	$55,000+

If you have substantial personal financial assets, income, or a family depending on you, that gap can be devastating. Consumer groups generally recommend liability limits of at least $100,000 per person and $300,000 per accident. Even non-standard drivers with SR-22 requirements benefit from more than the bare minimum amount, and Acceptance Insurance can help balance better bodily injury protection with an affordable payment plan. 

Myth 5: “Comprehensive Insurance Covers Everything” 

Comprehensive insurance covers non-collision damage: theft, vandalism, fire, hail, falling objects, flood, and animal strikes. That is it. It is one piece of physical damage coverage, not a catch-all. 

Here is a quick comparison: 

Event	Covered By
Hailstorm dents your hood	Comprehensive coverage
You back into a pole in a parking lot	Collision coverage
Engine fails due to age	Neither (mechanical repairs are excluded)
Laptop stolen from your back seat	Renters or homeowners insurance

Comprehensive and collision coverage each carry separate deductibles, and neither covers routine maintenance or wear and tear. Personal belongings stolen from inside the vehicle are typically not covered under your auto policy either. 

Myth 6: “Your Credit Doesn’t Affect Car Insurance Rates Anymore” 

Many drivers believe that insurance companies no longer look at credit, or that credit only matters for loans. Neither is true. 

In 46 states, insurers use credit-based insurance scores to price personal auto insurance. Only California, Hawaii, Massachusetts, and Michigan ban this practice. Even drivers with clean records can pay higher premiums if they have poor credit, where credit-based insurance scores are permitted. 

The impact is significant: drivers with poor credit can pay 50% to 200% more than those with excellent credit, all other factors being equal. A good credit score demonstrates responsible management of financial affairs and therefore good insurance scores tend to follow. 

Improving your score is not instant, but paying bills on time, lowering balances, and correcting errors on your credit report all help over time. For specifics, read our guide on how credit score affects car insurance rates. 

Myth 7: “Full Coverage Means I Never Have to Worry About Anything” 

Full coverage is not a legal or official term in the insurance industry. In practice, it usually means a combination of liability, collision and comprehensive insurance in an auto insurance policy. But it still has limits, deductibles, and exclusions that can surprise drivers. 

Common gaps include: 

• No coverage for mechanical breakdown or routine maintenance 

• Custom stereo, rims, or modifications covered only up to a small limit without a special endorsement 

• Separate deductibles for collision vs. comprehensive 

• No rental reimbursement or roadside assistance unless added as secondary coverage options 

Most lenders require full coverage for financed vehicles, which is why many borrowers carry collision and comprehensive coverage. Even with full coverage, a payout is based on actual cash value (ACV), not what you paid or what you owe. If you financed the car, you might still owe more than the insurance will cover. Gap insurance is an optional add-on that pays the difference and can save you from major out-of-pocket costs if your car is totaled. 

Adding coverages raises your auto insurance premium, but it often prevents far larger losses. Learn more about the forces behind premium changes in our post on why insurance rates increase. 

Myth 8: “Personal Auto Insurance Covers Business Use Without Any Changes” 

If you use your personal auto for food delivery, rideshare, courier work, or regular client visits, your standard auto insurance coverage may not protect you. 

Most personal auto insurance policies are written and priced for everyday driving: commuting, errands, and family trips. Business use such as transporting goods for pay or making frequent deliveries is often excluded or limited. If an accident occurs while you are working and your auto insurance policy only covers personal use, a claim could be denied, leaving the driver to cover his or her auto insurance gap entirely out of pocket. 

There is a difference between driving to a one-time meeting and running deliveries five days a week. For regular commercial activity, you may need to purchase business vehicle insurance or add a business use endorsement. Acceptance Insurance offers commercial auto coverage and can help gig drivers in cities like Atlanta, Houston, and Phoenix match their coverage to how they actually drive. 

Myth 9: “Insurance Only Goes Up When You Have an Accident” 

Car insurance rates can rise even if your personal record is spotless. Broader market forces affect every policyholder. 

Inflation in labor and parts, rising medical costs, more frequent severe weather events, higher litigation awards, and supply chain delays all push repair costs up. When auto insurance companies file new rates with local and state agencies, those trends are reflected across entire territories, not just individual drivers. 

Individual changes matter too. Moving to a ZIP code with higher theft rates, adding a young driver, switching vehicles, or increasing commute miles can all shift your premium. Even an insurance claim filed by someone else in your household can affect pricing. 

Laws differ by state in how and when these adjustments are applied. For a detailed breakdown, read our post on why car insurance goes up. 

How Insurers Really Calculate Auto Insurance Rates 

Insurers use state-approved rating plans built on actuarial data, not guesswork. Every auto policy starts with a base rate for the vehicle and territory, then applies multipliers based on individual risk factors. 

Major rating factors include: 

• Driving history over the past 3–5 years (accidents, violations, claims) 

• Location (ZIP code, traffic density, theft and vandalism rates) 

• Vehicle type, age, and safety record 

• Annual miles driven and usage type (commute vs. pleasure vs. business) 

• Prior insurance continuity (gaps in coverage raise flags) 

• Credit-based insurance score (where permitted) 

• Overall safety record and selected coverage limits 

Discounts for safe driving, multi-car policies, anti-theft devices, low mileage, and a car insurance discount for bundling can bring costs down. You cannot control regional storms or citywide traffic trends, but you can control many other factors: keeping a clean record, choosing a vehicle with solid safety ratings, completing an accident prevention program, and reviewing your coverage policy regularly. 

If your rate changes unexpectedly, review your declarations page. Then call Acceptance Insurance or visit a neighborhood office to walk through your rating factors line by line with a licensed insurance agent. 

Putting the Myths to Rest: Getting the Right Coverage at the Right Price 

Understanding what really affects your auto insurance costs helps you ignore common auto insurance myths and make smarter decisions. Pull out your current auto policy and review your coverage limits, deductibles, and optional protections. Do they still fit your life, your car’s value, and your financial situation? 

Acceptance Insurance specializes in helping non-standard and everyday drivers find affordable financial protection without relying on myths or guesswork. Whether you need to fully protect a financed vehicle or find the minimum coverage that keeps you properly protected and legal, we are here. 

Ready to separate fact from fiction? Let Acceptance Insurance help you find coverage that fits your budget and your needs. Get a quote online, give us a call at 877-405-7102, or visit one of our offices today for affordable auto insurance!   

Frequently Asked Questions About Car Insurance Myths and Rates 

Does shopping around for car insurance hurt my credit or raise my rates? 

Most online quotes use soft inquiries that don’t affect your credit score. Comparing rates from multiple companies, including Acceptance Insurance, helps you find the best price. Your current insurer won’t raise your rate just because you checked other quotes. Rates change only when you buy or adjust coverage. 

Will my rate always go up after I file a claim? 

Not always. Rate changes depend on claim type, fault, amount paid, and state rules. Small claims like a cracked windshield may have little impact, but multiple at-fault accidents can raise rates. Ask your agent if paying out of pocket might keep your discounts before filing small claims. 

Is it true men always pay more for auto insurance than women? 

Gender can affect rates for younger drivers in some states, but many states limit or ban gender-based pricing. As drivers age, differences fade. Driving record, vehicle, and miles driven are more important factors. 

Do I need comprehensive and collision on an older car? 

These cover damage to your car but have deductibles. For low-value cars, premiums plus deductibles might exceed potential payouts. Compare your car’s value to coverage costs. An Acceptance Insurance agent can help you decide. 

How often should I review my auto policy to avoid myths? 

Review your coverage yearly or after major life changes like moving, job changes, adding a teen driver, or buying a new car. Check liability limits, deductibles, personal injury protection, and optional coverages. Staying informed helps avoid surprises. See our guide on how often to review your auto insurance.