When it comes to insurance coverage, don’t believe everything you hear. Understanding fact versus fiction can help you make the best decisions when it comes to choosing coverage that’s right for you.

1. The color of my car affects my auto insurance rate.

FALSE

Car color does not affect your insurance premium. However, other factors – including a vehicle’s model, make, year, and the driver’s experience and driving record – may impact auto insurance rates.

2. If I loan my car, car insurance follows the policyholder.

FALSE

In most states, lending a car to a friend also means lending your car insurance. This means that the car owner’s insurance company could be responsible for damages caused by an accident if you’ve given someone else permission to drive your car. Policies and laws may differ by state, so make sure you understand the rules before letting a friend drive your car.

3. I don’t need renters insurance – my landlord has coverage.

FALSE

Your landlord’s insurance only covers the building – not your personal property, personal liability, or any damage you may cause. Create an inventory by taking photos or video of your valuables, including furniture, clothing, electronics, appliances and more. You might be surprised to see how much you could lose in the event of a disaster.

4. My insurance policy acts as a warranty policy.

FALSE

Your insurance policy is not a warranty. If your roof wears out, for example, your insurance policy will not cover repairs – unless it is damaged by a covered event.

5. My homeowners insurance doesn’t have to cover my property’s full value.

TRUE

It’s only necessary to cover the replacement cost of your home – not your property’s land. Be aware that some mortgage companies may try to require new homeowners to purchase insurance for the entire loan amount, which may be more than the replacement cost.

For more information about auto and home insurance, call your AAA insurance agent or insurance customer service, or visit your local branch.