If you own a vehicle, you need to carry car insurance on your vehicle. When it comes to carrying car insurance, many people believe a lot of myths about car insurance. Here is the truth about auto insurance.

Myth #1: Your Driving Record Is All That Matters When Figuring Out Your Premium

One of the biggest myths that people believe is that your driving record is all that matters when it comes to figuring out your premium. Although your driving record matters, it is not all that matters.

Insurance companies take a variety of different factors into consideration to figure out your premium. They take into consideration factors such as your age, where you live, your credit score, your occupation, how many miles you drive each year, and the type of car that you drive. Each insurance agency gives a different weight to these factors.

Myth #2: Smaller Cars Are Cheaper to Insure

Second, many people believe smaller cars are cheaper to insure. However, this is not always true. Some smaller vehicles don't have the same safety equipment that bigger vehicles have, reducing the discounts you get for driving a smaller vehicle. Additionally, some smaller vehicles are more likely to be a total loss if they get into an accident, increasing the cost to insure the vehicle.

Before you purchase a vehicle, you should get the VIN number and call your insurance agency to find out what the insurance premium would be.

Myth #3: Car Insurance Companies Can Cancel Insurance Policies for No Reason

Third, some people believe that car insurance companies can cancel insurance policies without any reason. That is not true. There are state and federal rules that prevent car insurance companies from dropping your coverage without a covered valid reason before your premium period is over. As long as you are paying your insurance, and you provide the company with honest information, they have to keep up your coverage.

Myth #4: Car Insurance Will Pay Off Your Car Loan if Your Vehicle Is Totaled

Fourth, many people wrongly believe if they get into an accident, their car insurance will pay off their vehicle. However, this is not true. Your insurance provider will only give you the money for the value of your vehicle, which may be less than what you actually owe on your vehicle.

If you want your insurance to pay off your car loan in the event of an accident, you will have to get gap insurance, which is an add-on that will cover the difference between the value of your car and the value of your loan, allowing your car to be paid off in the event of a total loss.

Car insurance companies use a wide range of factors to determine the rates that you pay. Your insurance company can't just cancel your coverage for no reason, and if your vehicle is totaled, your car insurance will just pay you the value of the car, not what you owe on it, unless you have gap coverage.

To learn more, contact a local auto insurance provider.