'Volume Two' of misconceptions drivers should know before making coverage decisions

LOS ANGELES, Jan. 20, 2026 /PRNewswire/ -- Misinformation about auto insurance continues to circulate, leading many drivers to make decisions based on outdated or inaccurate assumptions. To help consumers stay informed, Mercury Insurance (NYSE:MCY) is releasing Volume Two of its auto insurance myth–busting series—focused entirely on new misconceptions that can affect coverage, cost and peace of mind.

"Even savvy drivers can be misled by insurance myths," said Justin Yoshizawa, Director of Product Management at Mercury Insurance. "Understanding what coverage actually does—and doesn't—do can help people avoid unpleasant surprises after an accident."

Here's the latest lineup of auto insurance myths — and the facts that stand in their place:

Myth #1 — You Can Negotiate Your Auto Insurance Premium

Fact: Insurance rates aren't like haggling for a car price. They're calculated using approved rating formulas and risk models regulated by state insurance departments — so you can't negotiate a lower rate directly with your carrier. What you can do is shop for discounts, adjust coverage levels, or improve your risk profile to influence your premium.

Myth #2 — You Don't Need Medical Payments Coverage if You Have Health Insurance

Fact: Even if you carry health insurance, your auto policy's medical payments or personal injury protection (PIP) can still be valuable. These coverages may pay medical costs regardless of fault and can help cover expenses not covered by health insurance — including deductibles, co-pays, ambulance bills, lost wages, and more, depending on state regulations.

Myth #3 — Full Coverage Means You're Covered for EverythingFact:

"Full coverage" is a common shorthand used to describe a policy that includes liability, comprehensive, and collision coverage. Even with all three, coverage is still subject to limits, deductibles and exclusions, which means certain situations and expenses may not be covered unless additional protections are added.

Myth #4 — All Insurance Companies Are Basically the Same

Fact: Each insurer has different underwriting guidelines, risk models, discount structures, service levels and claims handling practices. Shopping only on price — without comparing coverages and service reputation — can lead to surprises when you actually need to file a claim.

Myth #5 — A Not-At-Fault Accident Won't Affect Your Rates

Fact: Even if you weren't at fault, filing a claim can still influence your insurance score and possibly affect future pricing — depending on your state and your carrier's specific rating rules. It's always worth discussing the scenario with your agent before deciding whether to file.

Myth #6 — New Cars Are Always More Expensive to Insure

Fact: A new car often costs more to insure than an older one, but this isn't automatic. A new vehicle with high-end safety features or strong crash-worthiness and theft-deterrent systems may actually be less expensive to insure than a different used model with poor safety ratings or costly repair costs. Vehicle safety and repair costs — not just age — influence premiums.

Myth #7 — Insurance Automatically Pays for a Rental After an Accident

Fact: Rental car reimbursement is an optional add-on. Unless you specifically select rental reimbursement coverage, your auto policy won't pay for a temporary vehicle while yours is being repaired.

Myth #8 — If Your Car Is Totaled, Your Insurance Pays Off Your Loan or Lease

Fact: Car insurance settlement is based on the vehicle's actual cash value at the time of loss, not what you originally paid — meaning depreciation can leave you owing money on your loan or lease even after a total loss. Gap insurance is a separate optional coverage that can help cover the difference.

"Dispelling myths is about more than just good information — it's about building insurance confidence," added Yoshizawa. "We want drivers to make choices based on reality, not rumor."

Mercury encourages drivers to review their policies regularly, ask questions, and work with knowledgeable agents to ensure coverage aligns with how and where they drive.

About Mercury Insurance

Mercury Insurance (NYSE:MCY) is a multiple-line insurance carrier predominantly offering personal auto, homeowners, renters and commercial insurance through a network of independent agents in Arizona, California, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia, as well as auto insurance in Florida. Mercury writes other lines of insurance in various states, including commercial, business owners and business auto, landlord, home-sharing, ride-hailing and mechanical protection insurance.

Since 1962, Mercury has provided customers with tremendous value for their insurance dollar by pairing ultra-competitive rates with excellent customer service, through more than 4,200 employees and a network of more than 6,340 independent agents in 11 states. Mercury has earned an "A" rating from A.M. Best, as well as "Best Auto Insurance Company" designations from Forbes and Insure.com. For more information visit www.MercuryInsurance.com or follow the company on X, Instagram or Facebook.

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SOURCE Mercury Insurance Services, LLC