Auto insurance – and what is covered when – is often misunderstood, with at least part of the blame attributed to tedious or confusing language in the insurance policy itself. Have you ever tried to read one of those from start to finish?

Where coverage is not well understood, myths and folklore take over, passed from one generation to the next. Here are a few common auto insurance myths – and the truth about your coverage.

Myth 1. If someone else drives my vehicle, their auto insurance will pay for the damages.
Your auto insurance policy covers you and others on your policy as well as providing coverage for occasional use of your vehicle if you lend your car to a friend, neighbor, brother-in-law, etc. If that person has an accident with your vehicle, your auto insurance comes into play in most cases, placing a claim on your auto insurance history and possibly requiring a deductible toward repair costs as well. If someone else will be using your vehicle frequently or for an extended duration, it’s important to make your insurer aware of the additional driver to ensure coverage.

Myth 2. Lost or stolen items in my car are covered by my auto insurance.
If you purchase comprehensive coverage, your car is covered for theft, subject to your deductible. However, items inside your car, such as laptops, purses, cameras, phones, or the groceries you just picked up at the store are not part of your car. Your insurer may cover these items if they are lost or stolen, but only if they are covered on a separate policy, such as a homeowner insurance policy or a renter insurance policy. Again, a deductible may apply to these additional policies.

Myth 3. My credit doesn’t affect my insurance.
Depending on where you live, this myth may not be a myth at all. Rules regarding insurers using credit ratings to underwrite auto insurance vary by province. In Ontario, Newfoundland, and Labrador, insurers cannot use your credit rating to establish auto insurance rates. In Alberta, insurers must get your explicit permission before using your credit to help determine your auto insurance rate. Some other provinces don’t address the question at all.

It’s possible that your credit rating can affect your auto insurance rate – or even your homeowner insurance rate, although rules regulating credit and homeowners insurance rates vary by province as well. That’s two more reasons to safeguard your credit rating.

There are more myths about car insurance than there are provinces in Canada, so stay tuned for more myth busting.