There are a number of cars insurance myths which we need to know about as they create a false impression about car insurance policies and their rates. The first myth is that a ‘no-insurance’ means that one is not at fault in case of an accident. This is false as the meaning of this is that the insurance company pays for the damages suffered by the insured party irrespective of whose fault it is. The second myth is that a brightly colored car affects the insurance rate. This is false, because car insurance rates are based on the model, type, body, engine size and year of purchase of the car.

The third myth is that if a friend happens to bang your car his insurance company is liable for the damages. This is false as in this case the responsibility lies with you and this could increase the premium cost of your insurance. The fourth myth is that the insurance rate is decided by the government. This is untrue as the rate is of insurance is set based on the driving record, marital status and credit score.

The fifth myth is that if you have paid for the insurance premium the new car purchased by you is automatically covered. This is false as one has to remove a separate insurance for the new car. The sixth myth is that males under the age of 25 have to pay more for car insurance. This is also false as teenagers and seniors are in fact in the high risk group and have to be charged more.

The seventh myth is that credit score does not affect the insurance rate. This is false because a good credit rating has a positive impact in lowering insurance rates. The eight myths are that even without comprehensive coverage one is still covered for damages due to natural disasters and theft.

This is false and one has to purchase a comprehensive coverage to be covered for the above mentioned case. The ninth myth is that the personal car insurance covers both business as well as personal use of the car. This is not true and one has to get a separate insurance. The tenth myth is that people feel they do not require car insurance if they have not had an accident, but the fact is that it is legally necessary to have a car insurance.