Money Fix: 5 myths on car insurance

Just because something is stated as fact, doesn't mean it is. Axioms about car insurance can cost you.

Sort fiction from fact.

MYTH: Once your car is paid off, forget comprehensive or collision coverage.

TRUTH: It depends on the age of the car, the value, and your needs. A loss to your car like theft or collision can keep you without a car, and out of money quickly. Even if your car is 10 years old, comprehensive coverage for theft and glass breakage makes sense, says Dan Weedin, an insurance consultant with Toro Consulting in Seattle.

MYTH: Car color affects premiums.

TRUTH: Bright sporty colors like red and orange will not increase your rate, says Joel Ohman, founder of CarInsuranceComparison.com.

MYTH: Credit scores don't count.

TRUTH: Credit scores often factor into your rates. "All else being equal, the better your credit score, the better your rate," says Ohman.

MYTH: My friend's insurance will pay for damages.

TRUTH: If you let someone borrow your car, their insurance company won't pick up the tab if they get in a wreck. Insurance typically follows the vehicle.

MYTH: The more my car is worth, the more it will cost to insure.

TRUTH: The cost to repair or replace a car contributes to premiums, but a more significant driver of price is "loss history" -- how many claims have been paid on that model, says Frederick Khoury, senior vice president for the Private Client Group at Chartis in New York.