There are many misconceptions floating around about car insurance, some of which may affect the type of car you purchase. We clear up 10 common myths so you can make more informed decisions when it comes to your vehicle and your auto insurance.
1. Red cars cost more to insure
False. While your auto insurance is based on a number of variables, the colour of your car is not one of them. Your insurer does not care if you car is red, blue or black, as this does not factor in to your premiums.
2. Two-doors are more expensive to insure than 4-doors
Not always. Although 2-doors are often associated with sportier vehicles and thus thought to be more expensive to insure, insurers actually look at the claims history for that specific vehicle—not the number of doors. Just like with colour, insurers take a number of factors into consideration, which could mean 4-doors could cost more to insure than 2-doors.
3. The cheaper the car, the cheaper the car insurance
It depends. Some of the cheaper vehicles on the market are actually more expensive to insure due to their safety ratings, higher likelihood of getting stolen, cost of repairs, how often the make is involved in collisions, and how prone it is to vandalism. Take all of these claims factors into consideration, and it can sometimes cost less to insure a luxury model.
Tickets and Collisions
4. Parking tickets will make your insurance go up
False. However, while parking tickets themselves will not impact your insurance rates, unpaid tickets could affect your ability to renew your driver's licence, which could result in an administrative licence suspension, which could indeed affect your insurance rate.
5. Speeding tickets will make your insurance go up
Likely, but it's not always the case. Depending on your insurer, your first minor speeding ticket (typically considered being less than 50 km/h over the speed limit) may not affect your insurance rate. But if you get two or three of them, you can count on higher rates. Get any ticket for going 50 km/h or more over the speed limit, including your first one, and your rates will most certainly go up.
6. If someone else gets in an accident while driving your car, their insurance will pay for it
Nope. As the saying goes, "Lend your car, lend your insurance." When you let someone borrow your vehicle, they're borrowing your good driving record as well. If they crash your car, it's your rates that will be affected not theirs.
Where You Live
7. Your rates will match your neighbour's
False. While where you live is one variable that gets taken into consideration when determining your auto insurance rate, it's not the only one. Insurers also look at your driving experience, insurance history, how many drivers are in your home, as well as the amount and type of vehicles you drive.
8. Your rates will stay the same if you move
Doubtful. Although it's not the only factor, where you live does play a big role in determining your rates. If you change your address, your rates will likely change as well. The exact area where you move to will affect whether you end up paying more or less for your auto insurance.
9. Lower deductibles equal lower rates
False. The opposite is actually true: the higher your deductible, the lower your rates. Your deductible is the amount you have to pay in the event of a claim, your insurance company covers the rest. So if you're willing to pay more, your insurance company will likely meet you part way by lowering your rates overall.
10. All insurance is created equal
False. Car insurance rates vary considerably by company, especially in Ontario. This is why it's important to compare rates for auto insurance to make sure you're still getting the best deal.