5 Car Insurance Myths

Finding the right insurance package for your vehicle can take some time and you'll need to shop around to find the best rates and insurance package that meets your needs. When you're making decisions about what type of insurance policy to purchase and which company to work with, make sure you have all the facts. Believing some common car insurance myths could prevent you from finding a package that truly meets your needs.

Here are five common car insurance myths, debunked:

Myth #1: High-priced cars command high insurance rates.

Fact: The cost of your car insurance is based on a number of factors: the make and model of your vehicle, your driving record, your credit history and where you live. Having an expensive car doesn't necessarily mean that you'll end up paying a premium for insurance. Car insurance companies will look up the "loss history" of your vehicle to determine how much it might cost to repair or replace your car. Costlier claims on a certain type of vehicle usually mean higher insurance rates.

Myth #2: Driving a red car will increase your insurance premium.

Fact: Insurance companies won't calculate your premium based on the color of your car, but will charge you a higher rate if your car happens to be a sports car or a make that tends to be stolen or vandalized often.

Myth #3: As long as someone who borrows the car has insurance, they're fully covered.

Fact: When you let someone borrow your car, they will be covered by your insurance policy, not their own. If the costs of damage end up exceeding your insurance amount, their policy may be able to kick in to cover the remaining damage.

Myth #4: My purse, cell phone or laptop is covered if my car is broken into.

Fact: Your insurance company won't cover personal property inside the vehicle in the event your car is stolen or broken into. They will only cover the cost of any damage to your vehicle, or replace the vehicle if it cannot be traced after it's been stolen. The personal items inside your car are solely your responsibility.

Myth #5: If my car is stolen or damaged, my insurance company will pay for a loaner car.

Fact: When you're waiting for your car to be repaired or replaced and have to use a rental car for a few days or weeks, your insurance company may not end up reimbursing you for the costs of the rental. Check with your insurance provider to see if rental reimbursement is a benefit of your insurance package. In many cases, you'll need to pay a couple of dollars extra per month just to have rental reimbursement coverage.

Sources:

CarInsuranceQuote.com --Top 10 auto insurance myths debunked

Insurance.com: What a crock! 10 lies people believe about auto insurance

MSN Money -- The 6 biggest car insurance myths