Today we will tackle 10 common car insurance myths, debunk them and share the truth with you. It can be a crazy world out there. Fake news. Wild exaggerations. Social media fabrications. Out-right fibs. How is a person supposed to separate fact from fiction? It can sure be difficult.
There are plenty of car insurance myths circulating and confusing many insurance consumers. Some famous examples include red cars cost more to insure, speeding tickets won’t affect your insurance, your personal car insurance will cover you if I you use your car for business purposes.
These and other car insurance myths seem to hang around, and get repeated and repeated. It’s almost like repeating car insurance myths over and over will make them true. Sorry. No. Car insurance myths are just that, myths.
We know car insurance can be complicated and having untruths out there only further complicates things. It’s important to be informed about insurance. Insurance is about your protection and, really, what is more important than that?
Car Insurance Myths #1: Parking Tickets Affect Your Insurance
Fact or Fiction?
Answer: Fiction. Pure fiction.
Parking tickets do not affect your car insurance. Nobody likes getting a parking ticket. The only thing worse than getting a ticket is paying it. But getting one does not affect your insurance.
When you are getting a quote for car insurance, insurance companies do not know whether you have one, 10 or more parking tickets. Your parking tickets do not appear on the details that insurance companies review when determining your insurance premium. We repeat, parking tickets do not impact your insurance.
Be aware, however, that unpaid parking tickets can cause you problems when you want to renew the plates for your vehicle. When you renew your licence plate, you will have to pay the outstanding parking fines before you will receive the renewal. Yes, we hear you, as always, the government gets its money one way or another. The Ontario Government website has a section where you can check the status of your Ontario traffic tickets and fines, or view details on how to pay your fines.
Another question some people ask is if parking tickets will cause demerit points and could then impact their auto insurance premium. Let’s also reveal the truth about this car insurance myth. No, parking tickets do not incur demerit points. There are, however, other traffic violations, such as speeding, which, if you are convicted, will result in demerit points. Ontario’s Ministry of Transportation is a great resource if you’re looking for a full explanation on demerit points and, by the way, for those who travel by car and may have a driving violation conviction from another province or New York or Michigan states, demerit points can impact you.
Myths are tall tales that are circulated as truth. Often they are spread by word of mouth, but increasingly they are spread on social media. The same is true of car insurance myths. Often one person hears something from someone else and before you know it the car insurance myth is taken as truth.
Car Insurance Myths #2: Red Cars Cost More to Insure
Fact or Fiction?
Answer: Colourful fabrication, for sure.
Red cars are not more expensive to insure. Red, blue, whatever the hue – car colour does not affect the price of car insurance. Insurance companies don’t generally ask about colour.
What does impact your car insurance premium are factors such as your driving record and driving history, how far you drive, what your car is used for (such as pleasure or business) the make, model and year of your car and where you live. These and other factors are significant considerations when determining the cost of your car insurance.
The Insurance Bureau of Canada also notes that “the harder your car is to steal and the less expensive it is to repair, the less you pay for insurance.” In fact, auto insurance theft is such a costly problem for the insurance industry that the Insurance Bureau of Canada produces a list each year on the top 10 most stolen vehicles!
While we are at it, let’s dispel another of those car insurance myths: A 2-door vehicle is more expensive to insure than a 4-door. Not true.
A bit more about car insurance myths and myths in general: Myths are sometimes also called urban legends or urban lore. Car insurance myths, like all fabrications, are only believable because people circulate them. To dispel car insurance myths, know the truth and share it with others.
Car Insurance Myths #3: My Car Insurance Premiums Go Down At Age 25
Fact or Fiction?
A driver’s car insurance often is lower by age 25 because the driver has more driving experience, however, a bad driving history can mean higher rates at this age.
When it comes to car insurance, age is a major factor in the determination of car insurance premiums. And, generally speaking, your rates get lower as you gain driving experience. There are, however, other major factors at play.
In Ontario, you must be 16 years of age to get a driving licence and our provincial system is a graduated one wherein a driver must complete three levels (G1, G2 and G) of testing before they are fully licenced. Completing the three levels takes at least 20 months and a driver has up to 5 years to finish the licencing requirements.
Generally, insurance rates decline as the driver ages. By the time a driver is 25, he or she will have a maximum of 9 years of driving experience. Assuming the driver has a clean driving record, the driver’s insurance premium will generally go down. It’s important to remember that regardless of age, a driver who has a bad driving history – accidents or traffic violations – will see their auto insurance rates go up.
The take-away? Drive safely, keep a clean driving record.
A bit more about car insurance myths and myths in general: If you drive fewer kilometers, your insurance will be lower? True or false? Hmmm, this is a bit complicated. It is sometimes assumed that if you drive less, your insurance will be lower. Generally, driving fewer kilometers does help to lower your auto insurance premium. However, other details about you and your driving may in fact increase your premium. Factors such as how many ticket convictions you have and when these were incurred, and if you have accidents on your record and when they occurred. Determining your car insurance premium is a compilation of various factors. You may by driving fewer kilometers, but not with other factors.
Did you know that the word myth got its beginning with the Greeks? The word means speech and fiction. Mythology was a big deal to the Greeks – it was a way of explaining the world and nature. We’re pretty sure car insurance myths got their beginning much later – like after the invention of a car!
Car Insurance Myths #4: Driving An Older Car Means Paying A Lower Premium
Fact or Fiction?
Your car insurance premium may be lower if you drive an older car, however, a car’s age is one factor in calculating your premium. Other factors could increase your rate. The make, model and year of your car are factors that are taken into account when an insurance company determines your auto insurance premium. There are, however, a number of other important factors at play in the calculation of your car insurance premium. Among these are your age, how you use your vehicle, and your driving history.
If you drive an older car and you want to lower your premium, this tip could help you save some money:
If you drop collision coverage and/or comprehensive coverage on your older car, you will likely save a fair amount of money. Generally, the need for these coverages drops as your car ages. You need to determine if your vehicle is valuable enough to merit having these coverages. A discussion with an insurance broker will help you to determine this. Expert insurance advice is very useful when you are considering the value of collision and comprehensive insurance on an older vehicle.
Your car insurance premium may be lower if you drive an older car.
Another thing to think about…
Do you have a vintage or classic vehicle? If you have a vintage car or truck, you will want to be sure that you have the proper classic car insurance. Unlike many moderately old vehicles, classic cars and trucks have a higher value and you will want to make sure it is properly insured.
A bit more about car insurance myths and myths in general: Sometimes it’s complicated things that are shrouded in myths. This seems to be true for car insurance myths. Auto insurance is complex. There are many things to know and we aware of. In short, it can be difficult to understand. That’s why the help of a trained and independent insurance broker advisor is important. Brokers are independent. They don’t work for any insurance companies. Agents and insurance sales people who work for one company want to sell you their company’s insurance. A broker will reach out to several companies, shop the insurance market, to get you the right insurance coverage and insurance value for your lifestyle.
Car Insurance Myths #5: Car Insurance Works The Same Way Across All Provinces in Canada
Fact or Fiction?
Answer: Busted! This is fiction.
Car insurance does not work the same way across all provinces in Canada. Auto insurance is required by law across Canada, however, insurance delivery, rates, coverages and other details vary. Some provinces in Canada have public systems and others have private systems. Some provinces have higher rates than others. Required minimum coverage also varies, just to name a few differences.
The good news is that if you have Ontario auto insurance on your vehicle, you will have insurance coverage when you travel to another province. Ontario has a no-fault insurance system which means that regardless of who caused an accident, the insurance company you are insured with looks after your claim.
Ontario auto insurance also has mandatory uninsured automobile coverage. This means that you, as an Ontario driver, and some family members, are covered to the limit of your insurance liability coverage if you are in an accident with someone who has no insurance coverage.
Car insurance does not work the same way across all provinces in Canada.
A bit more about car insurance myths and myths in general: What is the impact of car insurance myths? It’s difficult to know. If you want to know the facts about car insurance in Ontario, speak to a registered insurance broker.
Car Insurance Myths #6: The Best Insurance Coverage Is The Most Expensive
Fact or Fiction?
Answer: Fib, fiction, not true.
The best insurance coverage provides you with the right protection, and what you need may not be the most expensive policy. The best insurance coverage varies from individual to individual.
For example, one person may want to have $1 million in liability coverage on their auto insurance policy. Someone else will want $2 million in liability coverage. Yes, it is true that more car insurance coverage costs more money. However, insurance brokers are trained and qualified to explain different insurance coverages to you so you can decide which coverages you want to purchase.
It is also true that the least expensive insurance policy could end up being the most expensive policy you ever buy. This is true because if you purchase insurance based on price alone without knowing the details of the policy, you may find in the event of a claim you are not covered or you are covered with limitations. In this situation, if you have no coverage or limited coverage, you will have to pay for the claim yourself or pay anything above the policy limit. This can be very expensive.
It bears repeating that the guidance of an insurance broker can be very helpful when determining the insurance you need and want to purchase. Insurance brokers will also go to several insurance companies to get you several quotes for your insurance. Prices, coverages, limitations and exclusions vary from company to company.
A bit more about car insurance myths and myths in general: Some myths do have a grain of truth of them. Take the car insurance myths about tickets impacting my insurance. Some tickets can impact your insurance. Parking tickets will not impact your insurance, but speeding tickets sure can.
Car Insurance Myths #7: If Someone Borrows Your Car And Gets In An Accident, It Won’t Affect Your Insurance
Fact or Fiction?
If someone borrows your car and gets in an accident, your insurance will be impacted. The accident will likely be on your driving record and your auto premium could rise. Remember this phrase: Your auto insurance travels with your vehicle. Or, to put another way: You lend your car, you lend your insurance.
Here are a few things to consider when lending your car to someone:
Be sure the person using your vehicle has a valid driver’s licence
Be sure the person you are lending the car to will not allow anyone else to drive it
Check that the vehicle ownership is in the car and that the auto insurance is valid. Have proof of insurance in the car or an electronic pink slip available to the driver
If someone – even if they live in the same house as you – is borrowing your car and driving it on a regular basis, be sure to let your insurance broker know. It may be advisable to include this person on the car insurance policy and failure to do so could invalidate your insurance
If someone borrows your car and gets in an accident, your insurance will be impacted.
Here is the bottom line: When you lend your car to someone, you are responsible for whatever happens. Be careful who you loan your car to.
A bit more about car insurance myths and myths in general: Just like Mom used to say: Don’t believe everything you hear – this is true for car insurance myths.
Car Insurance Myths #8: Personal Auto Insurance Also Covers Business Use Of Your Car
Fact or Fiction?
Most personal car insurance policies don’t cover business use. The insurance company prices your car premium for private use. This does not include risks that may arise with business use. Your best bet is to speak to an insurance broker who will ask for details on the business use of your vehicle and can get you insurance that covers this use.
Let’s say you happen to drive to a meeting for your business and you use your car. If this is not the norm, your personal car insurance can cover this. If, on the other hand, you often use your car to deliver items for your work or your business (including Uber, Skip The Dishes and other similar services) or if you go to worksites regularly, you should speak to an insurance broker to get the right insurance to cover business use.
Be aware that failing to disclose business use of your personal vehicle can invalidate your insurance. A claim may be denied and you may find yourself without insurance coverage.
A bit more about car insurance myths and myths in general: Another few words of wisdom: Trust what you see. Not what you hear – including those pesky car insurance stories.
Car Insurance Myths #9: The Minimum Car Insurance Required By Law Is Good Enough
Fact or Fiction?
The minimum car insurance required by law is often not enough to ensure you are properly covered. Ontario law requires that if you own a vehicle you must have at least a standard auto insurance policy. The main coverages of an auto insurance policy are third-party liability coverage, statutory accident benefits coverage, direct compensation – property damage coverage, and uninsured automobile coverage. There are minimum levels of coverage, however, in most cases, the minimum levels of coverage are not enough. You can increase your coverage and have many choices to purchase additional coverage that fits your needs.
Here are the main ‘sections’ in an auto insurance policy:
Third-Party Liability protects you when someone is injured or killed, or property is damaged. Pays defense costs to settle claims for any lawsuits against you, up to a set limit.
Minimum third-party liability coverage required by law: $200,000
Recommended: For a small amount of money, you can purchase $1 million or $2 million in liability coverage. We live in an increasingly litigious society and many liability decisions exceed $200,000. For a small amount you can increase your insurance protection. Keep in mind that if you have a claim for $200,000, for example, and the claim is settled for an amount that exceeds $200,000, you will have to pay anything over the $200,000 yourself. It’s easy to see why paying a small amount more for $2 million in third-party liability coverage can be well worth it.
Statutory Accident Benefits
If you have been injured in an accident, regardless of who caused it, accident benefits cover expenses not covered by OHIP, such as rehabilitation, caregiving and loss of income. The Financial Services Commission of Ontario explains more regarding the minimum coverages and additional optional coverages available.
Direct Compensation – Property Damage
If someone else is at fault for an accident, direct compensation covers damage to your vehicle, its contents and equipment, such as stereos and speakers, including loss of use and contents. There are conditions that must be met for this coverage.
The accident took place in Ontario
At least one other vehicle was involved in the accident
At least one other vehicle is insured by an Ontario-licenced insurance company or has a special agreement signed with the Financial Services Commission of Ontario (FSCO) to provide this coverage.
FSCO states that “If these conditions are not met, then you can make a claim on your optional Collision coverage (if you have it), whether or not you are at fault. If you don’t have Collision coverage, you may be able to pursue recovery from the at-fault driver.”
Uninsured Auto Coverage
This coverage protects you and your family if you are injured or killed by a hit-and-run driver or by an uninsured motorist, notes FSCO. It also covers damage to your vehicle caused by an identified uninsured driver.
There are options to increase your coverages to meet your needs and your protection preferences. Your best bet is to speak to an insurance broker who is trained to provide guidance. There is a lot to know when you are buying car insurance in Ontario. A professional insurance broker who knows car insurance, can provide guidance and will shop at several insurance companies to get insurance value and the right coverages for you. The best insurance is tailored to you.
An important thing to consider when buying insurance is working with broker who provides outstanding service. No one wants to buy insurance and never be able to reach their broker if they need to ask a question, change their coverages or – worse yet – make a claim. Personal service is important.
A bit more about car insurance myths and myths in general: Here’s another car insurance myth: Men always pay more for car insurance. This is often true, however, not always.
Gender is only one factor in a multi-factor determination of auto insurance premiums.
Car Insurance Myths #10: No-fault Insurance Means It’s Never Your Fault
Fact or Fiction?
Answer: Fiction. Fable. Fib. All of these.
No-fault auto insurance is often misunderstood. No-fault insurance means no matter who is at fault, your insurance company looks after your claim – damages or injuries to you.
No-fault insurance involves the way in which insurance claims are looked after. No-fault means the insurance company will look after its insured’s claims. For example, in an accident, your insurance company looks after your claim and the other person’s insurance company looks after their claim. In no way does no-fault mean that it’s never your fault or no one will be found to be at fault. Negligence will be determined and the person who is deemed to be at fault will probably see their insurance rates go up. Fault can be determined to be held by more than one person and may be split among the parties.
So why does Ontario have no-fault insurance? In a nutshell, no-fault helps to get claims settled more quickly because the insurance companies look after the claims of their customers.
Bonus Car Insurance Myth: The Police Officer Said This Speeding Tickets Won’t Affect My Insurance
Fact or Fiction?
Answer: Not true.
If a police officer said your speeding ticket will not affect your insurance, the officer is wrong. Police officers are not insurance experts. Speeding tickets can impact your insurance.
It’s the severity and frequency of speeding tickets that matter the most when it comes to your insurance premium. The police officer you may be speaking to may not be aware of how many speeding tickets you have on your record. Minor and infrequent tickets may have a minor impact on your insurance. More serious speeding violations, can be another matter. The faster the speeding and the more dangerous the driving, the more severe the ticket and the worse the impact will be on your insurance. Some companies provide ‘forgiveness’ and will not increase your rates after one speeding conviction. Once a speeding ticket is on your record, it can impact your insurance for up to 3 years. Once a driver is convicted of a speeding ticket, it is added to the driver’s record by the Ministry of Transportation.
Speeding tickets can impact your insurance.
The bottom line here is to drive within the speed limit and drive safely. Speak to your insurance broker about speeding tickets you may have and get guidance on how these may impact your car insurance.
Ensure You Are Properly Covered
Insurance brokers know there are plenty of car insurance myths are out there. They know what is true and what is not when it comes to auto insurance. Insurance brokers are licenced professionals. If you hear something about auto insurance that doesn’t seem right, it may be a car insurance myth. An insurance broker can help you determine if something is a car insurance myth or not. An insurance broker will explain details of auto insurance coverage, review coverages and options to increase coverages. We are here to advise and assist.
Morison Insurance is is an award-winning team of insurance brokers providing the best insurance and service for our customers. We are here to help. We have seven offices to serve you, we are available by phone, email and online. We have a 24-hour claims service and we are here to help resolve any claims you may have. We will shop at dozens of insurance companies to get you competitively-priced insurance coverage tailored to my individual lifestyle.
We encourage you to read more about our team, our insurance product offerings, and to check read read what customers are saying about us on Google, Facebook and Yellow Pages reviews!
This blog is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.
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