Getting your driver’s license is a major milestone, offering a new sense of freedom and independence. But right behind the excitement of hitting the road comes the responsibility of getting car insurance. For new drivers, the world of insurance can feel like a maze of confusing terms, hidden rules, and conflicting advice. It’s a landscape filled with myths and misconceptions that can lead to costly mistakes.

Many new drivers end up overpaying for coverage they don’t need or, even worse, finding themselves underinsured when an accident happens. Believing common myths can prevent you from making smart, informed decisions about your policy. The key to navigating this process successfully is separating fact from fiction.
This guide is here to help. We will walk through ten of the most common car insurance myths and provide clear, straightforward explanations to debunk them. By the end, you’ll have the knowledge you need to choose the right policy with confidence and avoid the common pitfalls that trip up many first-time insurance buyers.

1. Myth: The Color of Your Car Affects Your Premium
   This is one of the most enduring myths in the auto insurance world. The legend goes that red cars, being flashy and associated with speed, cost more to insure than a sensible beige or white car. Many drivers, new and experienced alike, genuinely believe that choosing a vibrant paint color will result in a higher insurance bill.
   The Truth: Color is Not a Rating Factor
   The color of your vehicle has absolutely no impact on what you pay for car insurance. When you apply for a policy, the insurance company asks for your car’s Vehicle Identification Number (VIN)

This number tells them everything they need to know for rating purposes: the make, model, year, engine size, body type, and factory-installed safety features. What it doesn’t tell them is the paint color.
Insurers are concerned with factors that statistically correlate with risk. This includes the car’s repair costs, its theft rate, and its safety record. A high-performance sports car will cost more to insure than a family sedan because it’s more expensive to repair and statistically more likely to be in an accident, not because it’s painted “arrest-me red.” You can choose that bold color without fear of a premium penalty.

1. Myth: You Only Need the Minimum Liability Coverage Required by Law
   Every state (except New Hampshire and Virginia, with some caveats) requires drivers to carry a minimum amount of liability insurance. Faced with the high cost of insurance, many new drivers are tempted to save money by purchasing only the bare minimum coverage. This seems like a smart way to cut costs, but it’s one of the riskiest financial decisions you can make.
   The Truth: Minimum Coverage Rarely Covers a Serious Accident
   State minimums for liability coverage are often shockingly low. For example, a state might require $25,000 for bodily injury per person, $50,000 per accident, and $25,000 for property damage. In a serious at-fault accident, these limits can be exhausted almost instantly.
   Imagine you cause an accident that injures two people and totals a brand-new SUV. Medical bills for even moderate injuries can easily exceed $25,000 per person, and the cost to replace the other vehicle could be $50,000 or more. If your policy limits are too low, you are personally responsible for paying the rest. This could lead to garnished wages, liens on your assets, and financial ruin for years to come. It is always wise to purchase liability limits that are high enough to protect your current and future assets.

2. Myth: “Full Coverage” is a Standard Policy That Covers Everything
   You will often hear people talk about having “full coverage.” This term suggests a single, all-encompassing policy that protects you from anything that could possibly happen to your car. New drivers often ask their agents for “full coverage,” assuming it’s a specific product they can buy.
   The Truth: “Full Coverage” is a Combination of Coverages
   There is no official policy called “full coverage.” The term is informal shorthand for a policy that includes three main components:
   Liability Coverage: Pays for damage and injuries you cause to others.
   Collision Coverage: Pays to repair or replace your own car after an accident with another vehicle or object.
   Comprehensive Coverage: Pays for damage to your car from non-collision events like theft, vandalism, fire, hail, or hitting an animal.
   While this combination provides excellent protection, it doesn’t cover everything. It typically won’t cover rental car costs while your car is in the shop or towing and labor unless you add those specific endorsements. Always review the details of your policy rather than relying on a vague term.

3. Myth: Your Credit Score Doesn’t Matter for Car Insurance
   Most people associate credit scores with loan applications for a house or car. It seems logical that your financial history has nothing to do with your driving habits. Because of this, many assume that their credit score has no bearing on their car insurance premium.
   The Truth: Your Credit Score is a Major Rating Factor
   In most states, your credit history is one of the most significant factors in determining your car insurance rate. Insurers use a specialized “credit-based insurance score” to predict your likelihood of filing a claim. Extensive industry studies have shown a statistical correlation between credit management and claims frequency. People with higher credit scores tend to file fewer claims.
   As a result, a driver with poor credit can pay significantly more for the same coverage as an identical driver with excellent credit. For new drivers just starting to build their credit, this can be a challenge. Focusing on paying bills on time and managing any debt responsibly can not only build a strong financial future but also lead to lower insurance costs.

4. Myth: If a Friend Borrows Your Car and Wrecks It, Their Insurance Pays
   It’s a common scenario: you let a friend borrow your car for a quick errand. If they get into an accident, it seems logical that their own car insurance policy should cover the damages since they were the one driving.
   The Truth: Insurance Follows the Car, Not the Driver
   In most situations, your car insurance policy is the primary coverage for your vehicle, no matter who is behind the wheel. If you give someone permission to drive your car and they cause an accident, it is your insurance policy that will be expected to pay for the damages.
   This means you would be the one to file the claim, pay the deductible, and potentially face a rate increase at your next renewal. The friend’s insurance might act as secondary coverage if the damages exceed your policy limits, but your policy is the first in line. Be very careful about who you lend your car to; you are also lending them your insurance.

5. Myth: A New Car Automatically Costs More to Insure Than an Old Car
   The logic seems simple: a brand-new car is worth more than a 10-year-old one, so it must cost more to insure. New drivers on a budget might specifically look for older cars, believing they will guarantee a lower insurance premium.
   The Truth: It’s More Complicated Than Just Age and Value
   While a car’s value is a factor, it’s not the only one. Sometimes, a newer car can be cheaper to insure than an older one. This is because modern vehicles are often packed with advanced safety features that older cars lack, such as automatic emergency braking, blind-spot monitoring, and more sophisticated airbag systems.
   Insurers offer discounts for these features because they are proven to reduce the frequency and severity of accidents. An older car might have a low replacement value, but it may also have a poor safety rating and lack modern anti-theft technology, making it riskier in other ways. Always get insurance quotes for specific vehicles you are considering before you buy.

6. Myth: You Don’t Need to Tell Your Insurer About a Part-Time Delivery Job
   The gig economy has made it easy to earn extra cash delivering food or packages. If you only do it for a few hours a week, it might not seem necessary to mention it to your insurance company. After all, it’s still just you driving your personal car.
   The Truth: Using Your Car for Business Requires Special Coverage
   A standard personal auto insurance policy explicitly excludes coverage for commercial use. This means that if you get into an accident while you are “on the clock” for a delivery or rideshare service, your personal insurer can legally deny your claim.
   To be properly covered, you need to either add a specific “rideshare endorsement” to your personal policy or purchase a separate commercial auto policy. The company you work for (like Uber Eats or DoorDash) may provide some coverage, but it often only applies during specific parts of the trip and may have high deductibles. Not disclosing this activity to your insurer is a major risk.

7. Myth: Your Rates Will Automatically Go Down as You Get Older
   New drivers, particularly teenagers, pay the highest insurance rates due to their lack of experience. It’s a common belief that premiums will just magically drop on your 21st or 25th birthday as you move out of the highest-risk age bracket.
   The Truth: Age is Just One Factor, and You Must Be Proactive
   While your rate will generally decrease as you get older and gain more driving experience, it’s not an automatic, guaranteed event. Other factors can keep your rates high, such as getting traffic tickets, causing an at-fault accident, or having a lapse in your coverage.
   Furthermore, insurers don’t always automatically apply new discounts. The best way to ensure you’re getting the lowest possible rate is to actively shop around for new quotes at least once a year and especially around your 25th birthday. A different company may offer a much better rate for your new, more mature risk profile.

8. Myth: Items Stolen From Inside Your Car are Covered by Auto Insurance
   You return to your car to find a broken window and your laptop, which was on the passenger seat, is gone. You have comprehensive coverage, which covers theft, so you assume the cost to replace your laptop will be covered by your car insurance policy.
   The Truth: Personal Belongings are Covered by Homeowners or Renters Insurance
   Your auto insurance policy is designed to cover the car itself and its permanently installed components. Comprehensive coverage would pay to repair the broken window, but it does not cover personal property that is stolen from the vehicle.
   Coverage for your personal belongings, like a laptop, phone, or gym bag, falls under your homeowners or renters insurance policy. This is a key reason why having renters insurance is so important, even if you don’t own many expensive things. It protects your property whether it’s in your apartment or in your car.

9. Myth: Once You Get a Quote, the Price is Locked In
   You’ve done your homework, shopped around, and found a great quote for your car insurance. You assume that the price you were quoted is the price you will pay once you finalize the policy.

The Truth: A Quote is an Estimate Until Your Information is Verified
An initial insurance quote is an estimate based on the information you provide. The final premium is only determined after the insurance company runs its official reports. This includes verifying your driving record (MVR), claims history (CLUE report), and credit-based insurance score.
If the official reports reveal a speeding ticket you forgot to mention or an at-fault accident from a few years ago, your final premium could be higher than the initial quote. It’s essential to be as accurate and honest as possible when getting quotes to avoid any unpleasant surprises when it’s time to pay.
Your Next Steps to Smart Insurance
Being a new driver comes with a steep learning curve, but understanding your car insurance doesn’t have to be part of the struggle. Now that you can separate these common myths from reality, you are in a much better position to protect yourself financially.
Your best strategy is to be an informed and proactive consumer. Ask questions, compare quotes from multiple companies, and read your policy documents to understand exactly what is—and isn’t—covered. By arming yourself with knowledge, you can secure the right protection for your needs without falling for the myths that cost so many new drivers time and money.