I’m not an expert when it comes to auto insurance, but being in the insurance industry I know that there are a lot of nuiances when it comes to insurance terminology. Here are a few misconceptions that I think a lot of people get confused about.

1. No fault means it’s not my fault. This is simply not true. No fault auto insurance means that your insurance company will pay for damages no matter who’s fault it is.

2. If my friend is driving my car and gets into an accident his/her auto insurance pay for the damages. It’s not the driver that’s insured, it’s the car that’s insured, therefore it’s your auto insurance company that will pay for the claim if your friend was at fault.

3. The government sets auto insurance premiums. The government has nothing to do with your car insurance rate. Where you live, your credit score, marital status and your driving record are what actually affect your premium.

4. The new car I just purchased is automatically covered. Not necessarily: Most automobile policies require that the policyholder notify the insurance company or agent within a specified number of days, if indeed coverage is desired for the newly purchased vehicle.

5. Even without comprehensive coverage, I’m still covered for theft, windstorms, hail and deer accidents.
Many drivers believe that if they only purchase collision insurance, which covers accidents involving objects, that they will also be covered for incidents that involve vandalism, hail, animal accidents and fires. That simply is not true. You need to purchase both collision and comprehensive coverage.