Auto Insurance Myths - Separating the True from the False
You hear so many different stories from different drivers ... It's important to shed some light on what's right and what's wrong. Let's take a closer look at the factors that influence the actual price of your auto insurance.
We are going to talk about some of the most common myths and facts. Let's start with a few questions to test your knowledge. True or false?
Common myths
Myth 1 - The color of your vehicle influences your insurance premium.
FALSE, The color of your vehicle is irrelevant to insurance. For example, a red vehicle does not cost more to insure. In fact, whether your vehicle is red, blue, black or silver, your insurance premium will be the same.
Myth 2 - A two-door car costs more to insure than a four-door car.
FALSE This is an auto insurance myth. In fact, a four-door vehicle can, in some cases, cost more to insure. In fact, when an insurance company calculates your premium, it takes into account the price of the vehicle, repair costs, frequency of thefts and history of claims.
Myth 3 - Some models have a higher insurance premium than others.
TRUE, Insurance companies take the vehicle model into account. To calculate the premium, they look at factors like repair costs, frequency of theft, vandalism and security ratings.
For example, the premium could be lower for a vehicle whose statistics show it is less likely to be stolen or involved in an accident. Also, the premium could be lower if the vehicle has better safety and handling characteristics or if it is less expensive to repair.
Tip: If you want to buy a new vehicle, consider a vehicle rated low risk by the Insurance Bureau of Canada. (The lower the risk, the lower the cost of insurance.)
Find out the consequences of an accident on your insurance premium
Current facts
Fact 1 - Where you live in Canada influences your insurance premium.
TRUE, In Canada, your insurance premium will vary depending on whether you live in an urban, suburban or rural area. Insurance premiums tend to be higher in urban areas because there are more cars on the road, which increases the frequency of accidents.
If you live in an area with a high auto theft rate, you will likely pay more for your insurance. Each year, the Insurance Bureau of Canada publishes a list of the ten most stolen vehicles in Canada. See if your vehicle is on the charts
Fact 2 - If you are under 25, you are paying more for your auto insurance.
TRUE Age is a factor in calculating your auto insurance premium, but it's not the only one. Here are some other factors insurance companies take into account:
Your driving history
The type of vehicle you drive
How you use your vehicle
The number of people who drive the vehicle on a regular basis
Your place of residence
The type of protection you choose
Industry factors, such as markets, inflation, taxes and regulations.
Fact 3 - Parking tickets increase your insurance premium.
FALSE, Parking tickets are not taken into account in your driving record or in your insurance. Finally, a clear answer as to whether parking tickets affect insurance. However, if you have unpaid tickets, these will affect your ability to renew your driver's license.
Fact 4 - If you get a speeding ticket, your insurance premium will increase.
TRUE Typically, speeding tickets influence your insurance premium. Depending on the seriousness of the situation, your insurance could be canceled upon renewal.
Fact 5 - You don't have to pay the deductible if the police say the accident was not your fault.
FALSE, Even if the police decide you were not responsible for the accident, your insurance company should still determine if you should pay your deductible.
Fact 6 - If you have an accident in the United States, your auto insurance is not covering you
FALSE, Your auto insurance is valid throughout Canada and the United States. It is therefore a good idea to always have your auto insurance certificate ("pink card") with you. Depending on your coverage, you and your vehicle should be covered if you have an accident in the United States.
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