For something as common as car insurance, there are a whole lot of myths out there about it. The trouble with car insurance myths is that they can end up influencing your decisions and costing you money. The following myths, compiled by Kanetix.ca, will help you seprarate what’s fact from what’s fiction in the world of car insurance.
1. The colour of your car affects your car insurance rate.
Most people assume otherwise, but in truth it doesn't matter if your car is blue, red, silver, white or black. Your car insurance rate will not be impacted by the colour of your car.
2. Rates are higher for two-door vehicles.
While a two-door may look sportier, it doesn’t mean it will cost more to insure. Insurers look at things like the car's accident frequency, repair costs, theft frequency, vandalism and safety ratings — not the number of doors it has — when determining the insurance rate.
3. Rates are higher for new cars.
While there is a correlation between the value of a car and how much it costs to insure, a new car won’t always be more expensive to insure than a used one. New cars usually have more safety features and advanced anti-theft features, which can actually bring down rates.
4. New cars are more attractive to car thieves.
Each year, the Insurance Bureau of Canada (IBC) tallies up the most stolen vehicles in Canada, and each year the list typically shows that older cars are stolen more often than new cars. In fact, the most recent list shows that the most stolen cars were made between 2001 and 2007.
5. If you lend your car and the driver gets in an accident, it's not your insurance — but theirs — that pays out any claims.
In most cases, when you lend your vehicle, you are essentially lending your insurance as well, so be mindful of who you hand over your car keys to.
6. Getting a parking ticket means your insurance rates will go up.
Parking tickets do not count against your insurance, but unpaid fines could affect your ability to renew your driver's licence or even result in a licence suspension—which will then affect your premium.
7. Getting a speeding ticket means your insurance rates will go up.
Your first minor speeding ticket (usually less than 50 km/h over the speed limit) may not affect your insurance rate; it will depend on your insurer. But, get two or three and you'll be paying more for insurance. A major speeding ticket (50 km/h or more over the limit) will make your rates go up for sure.
8. If your car is stolen, you’ll be covered.
This is true, but only if you have purchased comprehensive coverage, an optional coverage. Comprehensive coverage will pay for damages that are not caused by a collision; things like theft, vandalism, fire, hail and even some damages that involve wildlife.
9. If you cause a collision, the damages to your car will be covered.
Damages to your car may be covered, but only if you’ve purchased collision coverage. Collision coverage is an optional coverage (like comprehensive), and will provide coverage in the event you are responsible — wholly or partially — in a collision.
10. The lower your deductible, the lower your premium.
A deductible is the portion of an insurance claim you agree to pay; your insurance company picks up the rest. If you’re looking to lower your premiums, you’ll actually have to increase your deductibles.
11. Only bad drivers need to shop around for car insurance.
Too often, drivers think that only those with a less-than-perfect driving history have to shop around. This is simply not true. Rates vary considerably between insurance providers no matter what your driving record looks like. Everyone, good drivers and bad, should shop around to make sure they're getting the best price for the coverage they need.
12. Your rates will be similar to your neighbour's rate.
Where you live is just one component that affects your rate; there are many others such as your driving experience, insurance history, the number of drivers in your home, and the number and type of vehicles you drive.
13. You'll pay the same auto insurance rate if you move.
Where you live is one of the factors taken into consideration when determining your rate. When you move your premiums will likely change too; for some drivers it might mean paying less, for others, it may be more.
14. Your loyalty discount is worth more than any savings switching insurers will net you.
Changing insurance companies would mean losing your loyalty discount, but that doesn’t mean you’re currently getting the best rate available. Shop around because sometimes the savings realized by switching providers outweigh any loyalty discounts you may have, if you have any at all.
15. All car insurance companies charge about the same.
Rates can vary by hundreds or even thousands of dollars to insure the same car and driver for the exact same policy, depending on the company. So it pays to shop around.
Car insurance fact: The best way to save is to shop around for a better deal.
A sure-fire way to lower your car insurance premium is to compare quotes, at minimum on an annual basis before your renew. Kanetix.ca shops the market for you to help you find a better car insurance rate. No one covers as much of the market as we do. This is why Kanetix.ca shoppers save an average of $750 on their car insurance premiums. Shop around for car insurance to make sure you are getting the coverage you need at the best available price.
