There are a lot of popular misconceptions about auto insurance, which can blur the facts, making it hard to understand what is actually true. Let’s separate fact from fiction and debunk the top 10 auto insurance myths so there isn’t any confusion when looking for a policy that suits your needs
- Insurance companies are only out to swindle you
Let’s face it – insurance is an industry that has a bad rap. From claims that weren’t covered to extremely high premiums, insurance companies can be painted as the “bad guys.” When you or a friend has had a bad experience with an insurance company in the past, it’s natural to expect it to happen again. Working with an insurance broker is the best way to ensure you have an advocate on your side, and who will be there when you need them the most. From finding you the best quotes, to helping you navigate a claim, your insurance broker is your go-to, trusted advisor who has your back. They are specially trained experts who are licensed to help protect what matters the most to you.
- “No fault” insurance means you can play bumper cars
It’s a common misconception that no-fault insurance implies you won’t be held accountable if an accident were to occur. Working with law enforcement, insurance companies carefully review the events that led to an accident to determine who is “at fault.” If you’re at fault on the road, your premium will go up. No-fault insurance, also known as personal injury protection insurance, exists to help ensure you and your passengers’ medical expenses and loss of income are covered in the event of an accident, regardless of who is found at fault. Speak with your broker to better understand this clause.
- You should pick your car colour carefully
If you’re a fan of red, don’t let your insurance premium hold you back. It’s a myth that vehicle colour will directly impact the amount of your premium. Insurance companies calculate premium using algorithms and different variables such as the year, make, model and age of your vehicle, including your driving history, location and other lifestyle factors. Your driving record, the number of hours you spend on the road and the drivers listed on your policy will have the biggest impact on your premium. Your broker will know which discounts you may qualify for to keep your premium down and to get you the best rate.
- It doesn’t matter how many doors your car has
Similar to the colour of your car, two door vehicles do not always cost more than four door vehicles to insure. So if you are looking for the sporty option, it might not skyrocket your premium. However, the make, model and year of the car you own are uniquely considered by different insurance companies and their rating systems. Brokers know which insurance companies will best meet your needs and will provide the best coverage, at the right price for your vehicle.
- Premium is only impacted by demerit points, not tickets
Demerit points and tickets are not one in the same. Insurance companies don’t look at your demerit points, but there is a common misconception among consumers that demerit points will affect your premium. Demerit points will stay on your record for two years from the offence date and tickets stay on your abstract for three years. Some insurance companies may forgive a first time offence, but if you’re someone who drives in the fast lane, you are putting yourself at risk for higher premiums on top of the ticket fine you have to pay. It’s important to review your driving record with your broker so that they can help you understand what to expect when it comes to the amount of your premium and if it will go up or down depending on your history.
- Distracted driving tickets don’t impact your premium
Your premium is calculated based on risk, and when you’re not focused while driving, you are a higher risk on the road. Not only can distracted driving result in tickets, demerit points, and fines, it will also increase the premium you pay. Stay focused while you are driving to keep you and those around you safe. Remember that all provinces in Canada, plus the Yukon and Northwest Territories now ban the use of cellphones or hand-held devices while driving.
- Auto insurance includes an unlimited rental car agreement if my vehicle is damaged in an accident
Many people think that when they get in an accident, a rental will be provided at no cost for as long as they need it, but there may be limits on the rental conditions your coverage provides. Auto insurance on your rental is non-negotiable, so it’s important to work with your broker to understand the rental coverage provided in your policy so that your needs are covered for the type of car you own. For example, it could take weeks to find parts for a BMW versus a Honda Civic, and you may be left paying out of pocket for your rental depending on the repair time.
- You’re not responsible for insurance on a leased vehicle
You are legally required to carry full coverage on a leased vehicle at all times. In fact, removing coverage is a violation of a lease agreement. You can’t take coverage off the vehicle while it’s in storage or not in use, and would have to pay out of pocket if anything were to happen, or worse, the leasing company could repossess the car.
- Buying auto insurance online is more affordable
Consider this example: One woman purchased insurance online and was delivering goods to customers using her “personal vehicle.” However, she didn’t disclose that she would be using her car for commercial purposes in her application, so when she got into an unfortunate accident while using car for business, the insurance company voided her policy and she had to pay out of pocket for repairs and rental car. Had she went to a broker, she would have got the information, service, customized options, support and personal relationship that online insurance shopping can’t provide.
- Buying insurance direct from one company is more efficient and will provide you with all of the coverage you need
While it’s possible to find the coverage you are looking for from one company it’s important to know that every insurance company is different and will offer a variety of coverage options, different products and services when you submit a claim. Sometimes you might need to divide insurance across different companies, and other times you may qualify for certain discounts if you bundle your policies. From purchasing a policy to making a claim, when you work with a direct writer you may need to speak with multiple people for the service you need. When you work with a broker, they are your one point of contact for all your insurance needs, especially if you are looking to insure your boat, car, and motorcycle. Brokers will also be able to determine which companies and products will protect you best, providing you with options from a number of different companies.
Take the confusion out of purchasing insurance and protect what matters most to you. Our brokers at Insurance Portfolio Inc. can help answer your questions and provide you with a no obligation quote. Let us do the shopping for you!