Usually, owning a vehicle means having a car insurance policy, given that nearly every state legally mandates coverage. However, truly grasping the intricacies of car insurance can be challenging due to the numerous myths and misconceptions surrounding it. With our licensed agents’ experience in the industry, Bankrate is dedicated to debunking 10 of the most prevalent car insurance myths, offering clarity on how your coverage typically functions.

10. If someone else drives your car, they cover any damage

Kicking us off at number 10 is the myth that insurance follows the driver, not the car. Wrong; it’s the other way around. Car insurance follows the car, not the driver.

If you loan your car to a friend and they cause an accident, your policy will be the primary insurance. Your friend’s policy could kick in secondarily, but only if the limits on your policy were used up. Some policies may have driver exclusions, too, which could mean that no one else is covered to drive your vehicle, so be sure you understand how your policy works before you give permission for someone to drive your vehicle, so be sure you understand how your policy works before you permit someone to drive your car.

9. Drivers with red cars pay more for insurance

The theory goes that drivers of flashy red vehicles are more likely to engage in risky driving behaviors and pay more for car insurance. Thankfully, this is a complete myth for anyone who owns a red car.

Your car insurance company probably doesn’t know what color your car is. Car insurance companies don’t use color to rate your policy. The exception would be if you pay extra for coverage on a custom paint job, but even then, the additional price is more about the custom paint than the color itself.

8. New cars are more expensive to insure

It’s a common assumption that insuring a new car will always break the bank. But that’s not the full story.

New vehicles usually come packed with the latest safety enhancements. These innovative features can play a pivotal role in preventing accidents or minimizing injuries when mishaps occur. As a result, insurance companies might view such cars as lower risk and offer a lower premium to insure the vehicle, which could benefit policyholders. Also, there’s usually a new vehicle discount, which usually decreases for three years before it ends.

However, there’s always the flip side of the coin. The sophisticated parts in new cars can be pricey to fix or replace. This potential expense can lead to increased insurance premiums. Due to the same reasons, owners of newer models are often inclined or required by a lender to opt for comprehensive and collision coverages. The added protection can be great, but it typically comes at a premium, increasing your overall insurance costs.

In a nutshell, while new cars have factors that might reduce insurance costs, they also have elements that can elevate them. It’s not a one-size-fits-all scenario.

7. A not-at-fault accident won’t affect my rates

If the other driver’s coverage takes care of everything and you don’t turn in a claim to your insurance company, or if you and the other driver handle the issue out of pocket, this should be true. Unfortunately, if you turn in a claim to your insurance company — even if you aren’t at fault — there’s a risk that your premium could increase. You shouldn’t be penalized or surcharged for the claim since it wasn’t your fault, but if you have a claim-free car insurance discount, you could still lose it, which may result in a higher premium.

6. All car insurance companies are the same

Far from it! While most car insurance companies offer similar coverage, other factors set them apart. Each company has its own rating system, which means you’ll get different rates from different companies even for the same coverage.

Different companies also have different endorsements. Some common add-ons exist, like car rental coverage and roadside assistance coverage, but you may be looking for a company with a more specialized option, like ridesharing insurance. Discounts are similar — you’ll likely find common discounts with most insurance companies, but some carriers offer more unique savings.

Some companies have local agents, while others do everything digitally. Finally, third-party customer satisfaction scores and financial strength ratings vary widely, and these can help you develop a well-rounded view of a carrier.

5. Your quote is what you will pay

A quote is just that — a quote. Many companies will give you a car insurance quote based on the information you provide. If that information isn’t accurate, your quote could change when you are ready to purchase the policy. Auto insurance companies pull two reports — a Comprehensive Loss Underwriting Exchange (CLUE) report and your Motor Vehicle Record (MVR) — before presenting you with the final price and allowing you to purchase coverage. These reports show your history of insurance claims and traffic incidents. If you didn’t include this information on your quote, or if the information you included wasn’t correct, you’ll likely see an increase in your final price.

4. You only need minimum coverage

While you only need your state’s minimum coverage levels to drive legally, you may still need more coverage, depending on your situation. If you have a loan or lease on your vehicle, you’ll likely be required to purchase full coverage. Even if you own your vehicle in full and could legally drive with just the state minimum coverage, purchasing higher liability limits may be worth considering. The price difference is generally small, and you gain a lot more financial protection.

3. Full coverage covers everything

“Full coverage” is an industry term that means your policy includes comprehensive coverage and collision coverage, which covers damage to your vehicle from various perils. But having a full coverage policy doesn’t mean you are covered for every eventuality. Intentional damage, for example, is never covered.

Your policy may also have exclusions about who can drive your vehicle, what types of vehicle use are covered and what countries your vehicle is covered in. Discuss your policy’s coverage options when reviewing your coverage with an insurance agent. Everyone’s interpretation of full coverage is slightly different, and you want to ensure you have the coverage you expect.

2. You don’t need medical payments if you have health insurance

If you’re trying to save on your car insurance, you might be considering skipping medical payments coverage, especially if you have health insurance. There may be better strategies. Medical payments coverage covers you and your passengers’ medical costs if you’re in an accident, regardless of fault. In some states, personal injury protection (PIP) is available (often required) in lieu of medical payments coverage.

Even if you live in a state where these coverage types are optional and have health insurance, you should still consider buying the available option. Limitations on your health insurance policy may leave you with out-of-pocket costs. Your medical payments coverage might help cover your health insurance deductible, too. And in states where PIP is available, you may get more than just covering medical bills, like help with childcare costs, household responsibilities or lost income.

1. You can negotiate your premium

Pass the mic so we can say it loud: False! Negotiating the price you pay for car insurance is impossible.

Car insurance companies use proprietary algorithms to determine how much risk you present, and your rate reflects your risk level. If you get a lower rate from another company, that company’s algorithm views you as a lower risk. You can’t take that lower quote to other carriers and expect them to match it; those carriers can’t change their rating algorithms to get or keep your business.

You can influence your premium by choosing appropriate coverage and utilizing discounts, though, so there are ways you can get your price down.

The bottom line

Car insurance can be complex, which has resulted in misunderstandings cropping up. Knowing the truth about car insurance can help you make informed decisions about your coverage. Plus, now that you know the truth about common car insurance myths, you can help set the record straight whenever the topic comes up.