Debunking Today’s Most Common Auto Insurance Myths

August 9, 2017

Auto insurance myths

As common as car insurance is, there are many misconceptions about how it works. The problem with insurance myths is they can lead us astray. They may lead us to make decisions we might not otherwise make, or worse, cost us money somewhere down the road. Let’s set the record straight because although these myths are common, they’re easy to debunk.

1. Males pay more than females for car insurance

It’s true, young male drivers under 25 typically pay more for coverage than their female equivalent. However, once a driver is 25, gender is typically no longer a factor.

2. The cheaper the car, the less it costs to insure

Not necessarily. Your car’s premiums are based on a variety of variables including the likelihood that it will be stolen, vandalized or involved in a collision, as well as its safety features and repair costs. As a result, the value of your car does not solely influence how much you pay for coverage.

3. A sporty 2-door car is more expensive to insure than a 4-door sedan

In the same way that the value of your vehicle does not solely influence the premiums you pay, neither does the number of doors. Insurance companies rate cars based on the claims history of that particular vehicle, which means a 4-door could cost more to insure than a sporty looking 2-door model.

4. Thieves prefer to steal new cars rather than older ones

Last year, the Insurance Bureau of Canada’s list of the top 10 most stolen cars showed that older model cars were more likely to be stolen than newer cars; in fact, only one vehicle that made the list could be considered “new” and it was a 2015 Toyota 4Runner.

5. The colour of your vehicle affects your car insurance

This is one of the most common auto insurance myths and it is false. It doesn’t matter if your car is red, blue, silver, green, black or white, your insurance rate for that make and model of car will be the same.

6. Your auto insurance rate will stay the same if you move

If you are planning to move, the premiums you pay will likely change. How your rate changes will depend on your insurer’s claims experience in your new neighbourhood. Some neighbourhoods, for example, have fewer instances of auto theft (so your premiums may decrease); while other areas contain intersections more prone to collisions resulting in potentially higher rates.

7. Your rates will be similar to your neighbour’s

Where you live is just one of many factors that go into determining your auto insurance rate. Your driving experience, driving record, insurance history, the vehicle you drive and the number of drivers in your home are all factors taken into consideration when determining your insurance rate.

8. Parking tickets increase your insurance rate

Fortunately, this is false. Parking tickets do no impact your auto insurance rate; however, unpaid tickets can impact your ability to renew your vehicle’s licence plate.

9. Tickets and accidents means always paying more for car insurance

While you may pay more for insurance than if you had no tickets or accidents on your driving record, the good news is it’s temporary. Tickets usually stay on your driving record for three years and accidents about six years. As tickets and collisions fall off your record, your premiums should improve.

10. If you lend your car to a friend and they cause an accident, it won’t affect your insurance

If you lend your car, you are also lending them your insurance because the coverage is tied to the vehicle, not to the driver. Should your friend cause a collision, your premiums may increase.

11. 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. As a result, the more you’re willing to financially take on at the time of a claim, the less you’ll have to pay in premiums. So this is false, in fact, it’s the reverse that is true: the higher your deductible, the lower your premium.

12. If my car is stolen, I’ll be covered

This is only true if you have purchased comprehensive coverage, which is optional. Comprehensive coverage, if you have it included on your policy, will pay for damages stemming from things like theft, vandalism, fire, or hail.

13. If I cause a collision, the damages to my car will be covered

Damages to your car may be covered, but only if you’ve purchased collision coverage which is optional. Collision coverage will pay for damages caused by a collision that you are wholly or partially at-fault for having caused. If, however, you are 100% not at-fault for the collision, the damages will likely be covered (even though you may not have collision coverage) through another component of your policy.

14. If you shop around, your current insurer will know

Your current auto insurance provider has no way of knowing that you are shopping around for a better rate. What’s more, even if you were to tell them, there are no repercussions for comparison shopping.

15. You’re locked into your auto insurance policy for the year

If you shop around mid-year and find a better-priced policy, you can cancel your policy before its renewal; however, you may have to pay a cancellation fee. As a result, you’ll want to ensure that the savings are greater than the penalty. If they’re not, it may be best to wait until your policy is up for renewal, at which time if you cancel, there is no fee.

16. Shopping around for car insurance is only for bad drivers.

Too often, drivers think that only those with bad driving histories have to shop around. This is simply not true. Car insurance rates often change, and the insurer who offered you the best rate five years ago or even last year, may no longer offer you the best deal today. If it has been a while since you last shopped around for your coverage, chances are you’re overpaying. Compare auto insurance quotes today for a better price at