Myth #1: Color determines price of car insurance.

It doesn't matter if your car is red, black, white or blue. But the type of car you choose does matter. Auto insurance premiums are based on:

• Make
• Model
• Body type
• Engine size
• Age of vehicle
• Age of driver
• Driving record
• Credit history
• Car's sticker price
• Cost to repair car
• Overall safety record of car
• Likelihood of theft

Myth #2: It costs more to insure your car when you get older.

Many drivers over 55-years-old can qualify for reduced auto insurance rates if they have successfully completed an accident prevention course. If you are retired or are not employed full-time, you could also be eligible for a discount. Discounts vary by state and insurance carrier.

Myth #3: Your credit has no effect on your insurance rate.

Your credit-based insurance score does matter. Insurance scores are derived from a person's credit history, which insurance companies take into consideration when you want to change or renew your car insurance.

Myth #4: You are covered by insurance if your car is stolen, vandalized or damaged by hail, flood or fire.

These perils are covered under the comprehensive and collision part of an auto policy. These are optional coverages! To protect your vehicle from all kinds of damage, you need to purchase both collision and comprehensive coverage.

Myth #5: You only need to purchase the legally required amount of auto liability insurance.

Almost every state requires you to buy a minimum amount of auto liability coverage. If you buy only the minimum amount of liability, chances are you will have to pay more out-of-pocket for losses because accidents often cost more than the minimum limits. The recommended minimum is $100,000 of bodily injury protection per person and $300,000 per accident.

Myth 6: If another person is driving your car, his or her car insurance will cover them if they're in an accident.

In most states, the insurance policy covering the vehicle involved in the accident is the primary insurance. This means if you let a friend drive your car and they are in an accident, your insurance would come into play.

Myth 7: Soldiers pay more for insurance than civilians.

No matter what branch of the military you are in, you may qualify for an auto insurance discount. This varies by insurance company and state.

Myth 8: Personal auto insurance covers both personal and business use of your car.

If you're self-employed and you use your car for both personal and business use, your personal car insurance may not protect you. Contact us to see if you should be obtaining a business auto policy.

Information from Insurance Information Institute