To many people, auto insurance can seem really complicated, especially with the wealth of myths and misconceptions about how it works. More often than not, it is these myths and misconceptions that wind up making you lose out in the end. The following is a list of the most popular myths about auto insurance along with the reality that lies behind each one.

Myth: It is more expensive to insure a red car.
Whether the car is black, beige, taupe, red, silver or a unique mixture of that embedded with some flame decals, the same make and model of a car with a varying colour will have the same rate; the colour that your car is has no bearing on the rates. The only things that do affect the rate of your auto insurance is its year, model, make, engine size, body type, the drivers on the policy and the age of the vehicle.

Myth: It is pointless to shop around for auto insurance if you are under the age of 25.
No matter how old you are, shopping around for your auto insurance can save you a great deal of money. Indeed, younger drivers must face the problem of having to pay for a higher rate of insurance, it can still make a significant impact on your monthly payment if you elect to shop around. There are usually different rates for drivers over the age of 25, but your premium ultimately depends on your driving record besides your age.

Myth: If you use your car for work, your employer’s insurance has your back.
Your policy affects the personal use of your car rather than commercial use. This means if you use your car for a courier job or a delivery task, you will not receive coverage from your employer’s insurance. Though you may receive a reimbursement for your mileage costs, you will not wind up having coverage if you get into an accident while on the job.

Myth: If you get into an accident, your rate will increase.
While possible, this is not necessarily true. If you cause the accident, then your rate is directly affect. However, you should also note that if you do wind up with a rate increase, your accident may not necessarily be the cause. Keep in mind that insurance rates are typically adjusted to keep up with your situation, which includes the number of claims in your neighbourhood, inflation, the statistics for accidents with others who drive your kind of car as well as other factors.

Myth: A friend who wrecks your car can cover it with his insurance.
Actually, remember that his insurance covers his car, and your insurance covers your car. To make it simple, consider your insurance to be a part on your car. That is, if you lend someone the keys to the car, you are also lending them your insurance. Remember this and consider the way your premium will be affected in the event of an accident. This also means you could be financially responsible if they wreck your car.

Myth: Auto insurance rates are not regulated, so companies can charge you anything.
Contrary to popular belief, rates for auto insurance are actually very strictly regulated. With the exception of Quebec, the law in all provinces states that insurers are required to submit their rates for approval to government agencies. These regulators will then review how the insurers are determining their rates and then ultimately decide whether or not it seems fair. After filing the rates with these entities, it is impossible to change them until the next filing comes around.

Myth: My rates will be the same as the rates my neighbour gets.
As it was previously stated, there are numerous factors that determine your rate: your neighbour isn’t one of them. Factors that determine your rates include age, the type of vehicle and your driving record. As all situations are unique, your rates will vary.

Myth: Drivers in all sorts of situations are covered under “comprehensive” coverage.
Indeed, comprehensive coverage is just one sort of protection that is available on a policy — with the others being Uninsured Motorist, Collison, etc. However, this type of coverage will only pay for damages incurred outside of a collision.