To most of us, car insurance isn’t a topic we stop and think about. But if you’re going to be spending thousands of your hard-earned dirhams on buying car insurance year after year, it isn’t a topic you should be ignoring. So why not educate yourself a bit about car insurance and how to make a financially sound and logical decision when buying your next policy.

The list of myths about car insurance doing the rounds is long, so let’s separate fact from fiction. Here are five commonly circulating car insurance myths that you shouldn’t be falling for.

Myth #1: Third party car insurance is always the cheaper option

Most people fall for this one, assuming that a third party policy is always cheaper than a fully comprehensive one. But this is not always the case. In fact with higher-risk drivers now opting for third party cover, in many parts of the world insurers have raised premiums for such policies.

In fact, you could end up having to fork out even more cash on out-of-pocket expenses with a third party cover that isn’t adequate to start with.

[Related: How to not get stuck with the wrong car insurance.]

Myth #2: My friend was driving the car, so he’s going to pay for any damages

Well that might sound logical to you, but does your insurer agree? No, because the insurance coverage follows the car, not the driver. And as the car owner, you are liable for all damages caused by anyone you allow to operate it. So if your friend wrecks your car, it is your problem, unfortunately. Now you’ll think twice before lending your car to your friends!

Myth #3: My car is covered, so my personal belongings inside it are covered too

If you believed this one, you’re likely not alone. Many people who make a claim for items stolen from inside the car, often realize this the hard way, once their insurer rejects the claim and turns them away. Why so? While car insurance covers damages and repairs to your vehicle caused by a break-in, the cargo within is typically not covered.

That being said, many insurers these days offer a premium coverage option that covers your personal effects up to a certain value. So if that’s something you want, make sure you opt for the right cover.

Myth #4: The colour of my car determines the premium I’m going to pay

We’ve all heard about how a bright red or otherwise flashy coloured car can drive up our premium. This is NOT true – The colour of your car does not factor into your insurance premium.

Your car type plays a significant role in determining your insurance premium, not the colour. So if you’re buying a red Honda hatchback (and not a red Mustang) you needn’t worry about the premium going up!

Myth #5: Cheaper cars cost less to insure

You might assume that buying a cheaper car would translate into paying a lower insurance premium, but this is not always the case.

Insurers take into account the “loss history” of car makes and models when determining your insurance premium. So an AED 100,000 sports car could be more expensive to insure than an AED 200,000 SUV, primarily if the sports car has a record of costlier claims and a high loss history.