Knowing the difference between fact and fiction can help save you time and money.

Here are 10 common car insurance myths and the truth behind each of them.

Myth #1: The colour of my vehicle affects the price of my car insurance.

Have you ever heard that the colour of a car effects the price of car insurance? In fact, colour has nothing to do with the equation that determines your premium. Instead, other factors – such as make, model, engine size and the age of your vehicle, for example – are taken into consideration.

One theory on the origin of this myth is the traditional association of “race car red” with fast cars!

Myth #2: My friend is protected under their own insurance when driving my car.

If you think your friend’s insurance covers them when they are driving your car, you are mistaken. While driver details are taken into consideration when your car insurance premium is calculated, insurance is attached to the car, not the individual.

Always exercise extra caution when allowing a friend to drive your car!

Myth #3: My personal car insurance covers me when I’m on the clock.

Personal car insurance and business car insurance are different things. If you plan to use your car for more than commuting and getting around town, you may not be covered under your personal car insurance plan. Whether you use your car for personal or business purposes, it’s vital to find a car insurance plan that’s right for you.

Myth #4: Driving history is the only thing used to calculate my premium.

There is more to calculating your car insurance premium than checking for a clean driving record. A whole slew of things – from your car’s original sticker-price to the cost of repairing your car in the event of an accident – are used to determine how much you pay. There are even special discounts for installing certain safety features on your vehicle, such as winter tires and an anti-theft system. Check with your insurance provider to see if they offer any savings and benefits to help you pay less.

Myth #5: Loyalty discounts trump any potential savings from switching providers.

If lower insurance rates are available, any loyalty discounts you might be receiving for staying with your current provider could be irrelevant. For example, if you are currently paying an annual premium of $1, 300 to insure your car, and are receiving a special 5% discount, your loyalty savings gives you a $65 discount on your premium. However, this amount is negligible if you could be paying $1, 000 per year instead! That’s why it’s all the more important to shop around – spending a little time now could save you a lot of money down the road.

Myth #6: Insurance costs more as you age.

As you move into old age, there are things you need to keep in mind. The good news is that rising car insurance is not one of them! Since many seniors do not drive as much as they used to, some insurance companies even offer special discounts for older drivers with clear driving histories.

Myth #7: The higher my insurance premium, the better my coverage.

Just because you’re paying a high premium to insure your vehicle, doesn’t mean your coverage is necessarily better. If you feel you’re paying too much for your insurance, it’s probably time to start shopping around. Contact your insurance provider to see if you could be paying less for car insurance.

Myth #8: Men pay more for car insurance.

This myth is actually true for men under the age of 25. But once you pass the halfway mark of your 20s, you are treated equally, regardless of sex.

Myth #9: Insurance covers theft, acts of vandalism and damage from nature.

Car insurance coverage depends on what plan you sign up for. While many plans do offer comprehensive and collision coverage, many people opt out of these features to save money.

Make sure you’re properly covered!

Myth #10: The absolute minimum insurance required by law is good enough.

Just like ‘Myth #9,’ this myth not true for similar reasons. Paying the absolute minimum for car insurance required by law means you are probably opting out of