Let’s face it, insurance has never been an exciting conversation starter we insurance professionals wish it were. Nevertheless, it is important that you understand how insurance works and how to avoid rumors and myths regarding the industry.
You wouldn’t believe some of the myths that have surfaced over the years and we are here to debunk them. So let’s get started:
Myth #1: It is more expensive to insure red coloured cars.
Really? Is a red car more expensive to insure than let’s say a beige car? False. Colour plays absolutely no role in accessing the insurance premium of your vehicle. So don’t be shy, buy the shiny red car, it won’t change anything.
Myth#2: If you get into an accident once or get a ticket, your insurance rates will always stay high.
This is a common myth in the insurance industry. People immediately think that because the made a mistake once that they will be punished for the rest of their lives. Well, luckily, there’s good news. Accidents and tickets against you only stay on your auto insurance record for 3 years. After this you can benefit from a reduction in the rate.
Myth#3: If I have a really bad driving record, I will not be able to get car insurance.
This one isn’t entirely true. The short answer is that yes, you can get insurance, however it will be pricey depending just how bad your record is. If your driving record is really bad, you may not be eligible for insurance with mainstream insurers, but you will be able to get it from companies that offer high-risk auto insurance. Last but not least, if you are unable to get your auto insurance from a high-risk insurer you will be able to get it from a special organization called Facility Association. This may break the bank and you may want to consider taking the bus for a few years.
Myth #4: Damages to your car are always covered.
Hate to break it to you, but this is not true. You are only covered for damages on your car if you have collision coverage as a part of your policy. So if you currently have insurance with us and want to add it give us a call 613-347-7600. If you are looking for comprehensive auto insurance give us a call, email, or drop in. We are always happy to meet new people.
Myth #5: Insurance works in the same way across all Canadian provinces.
In a perfect world this would be true. In fact it’s more complicated than that. The truth is, car insurance is different across Canada. “First, provinces use different insurance systems, either no-fault or tort (which is at-fault) or a mix of both. It defines whose insurance company pays for the claim and the ability of one side to sue the other. Second, a list of insurers who can provide insurance varies from province to province. In MB, SK and BC only one company per province – MPI, SGI and ICBC respectively can provide car insurance coverage.” (moneysense.ca)
Myth#6: No-fault insurance means that none of the parties involved in the accident is at fault.
To your credit, “no fault” sounds misleading. The fact of the matter is, there is always an at-fault party. The other circumstance is fault can be split between the two involved in the accident. This process results in faster payout times since the insurers do not spend time and resources figuring out who was at fault. But remember, someone is always at fault.
Myth#7: If you lend your car to a friend or family member, it will be covered by the borrowers insurance policy.
This simply isn’t true. In fact you are lending your insurance policy as well. Should your car be involved in an accident, it is your insurance policy that will be covering all the damages.
Myth#8: You do not have to inform the insurance company if you move.
Does it matter? yes it does. Location matters for a number of different reasons. Your location completely impacts your car insurance rates. “For example, if you move to Brampton, ON, your insurance rates will be considerably higher than the provincial average.” (moneysense.ca) Furthermore the insurer can refuse your claim, should you be in an accident, if you haven’t told them about your move.
Myth#9: Insurance rates for less valuable cars are lower.
This is false. Car insurance rates are actually dictated by the history of the car model. For example, insurance rates for Honda civics are generally higher than for many more expensive models.
Myth#10: Insurance for 2 door/convertibles is always more expensive.
Don’t let this myth stop you from buying these type of vehicles. The truth is, a roof doesn’t really matter. As strange as that sounds. Insurance for convertibles is not necessarily more expensive than their hard top companions. What matters is the insurance history for this category, such as theft of this car type, accident history…etc. If convertibles have a great track record as an average, your rates won’t be much different.