The most common auto insurance myths to look out for in 2018
If you are driving a car in Canada then by law you are required to have auto insurance to avoid being heavily fined. Whether you’re in Ontario and sourcing your insurance through a private company, or in British Columbia getting your insurance from the government, everyone should have some experience with auto insurance. Why, then, is it that there are still so many grey areas that could trick you into forking out more than necessary?
We uncovered nine of the most common auto insurance myths in 2018 so that you can stay smart when hunting for the right policy.
1. Red cars cost more to insure
Who knows where this myth began, but it seems to be one of the most common auto insurance myths year on year. However, that’s exactly what it is-a myth! It is the make, model and year of your vehicle that plays a vital role in determining your insurance cost and an insurer probably won’t even ask what colour your car is.
Consider your car’s claims history and average repair cost, as well as its popularity with thieves, when you’re trying to suss out why your premium has been given its price tag.
2. New cars are more likely to be stolen
This one is probably the biggest surprise out of them all, but despite what you might think, the newness of your car has little to do with whether it will peak the interests of a pesky thief. In fact, Insurance Bureau of Canada’s (IBC) top 10 most stolen cars of 2017 reveal that it is actually the opposite-the more mature cars seem to top the list. Especially if you have a Ford pickup truck sat on your driveway.
“We see from this list that criminals continue to favour all-wheel drive and four-wheel drive, older, high-end vehicles,” said Dan Service, Acting National Director of Investigative Services for IBC.
One way you can save yourself is to invest in some safety features, which can deter thieves and get you a gold star from your insurer.
3. Where I live won’t affect how much I pay
Your address is one of the key factors that comes into play when your insurer is calculating how much you need to pay for your policy. Insurers decide how much you pay based on risk, therefore the safety of the area you live in could be the reason you see your payable rise or fall. For example, some neighbourhoods will have fewer instances of car theft, while other areas may have a high number of accident-prone intersections.
Insurers will also take into account how far you travel on your daily commutes. If you spend a lot of time behind the wheel travelling to work, then chances are your premium will reflect this.
If you move house, be sure you let your insurer know. On the one hand, it could see you making some nice savings, but if you fail to do so you run the risk of being condemned for fraud due to rate evasion.
4. Cheaper cars cost less to insure
As the IBC list for most stolen cars prove, it isn’t always the value of a car that makes it more likely to be stolen or damaged. Instead, insurers will calculate their premium based on how likely they think it is that you will make a claim.
5. If I’m at fault for a crash, my insurer will cover damages to my car
A lot of people think that because they have an insurance policy, they are fully covered no matter what. While it might be a little bit of a head scratcher, this isn’t actually the case. Collision coverage-that’s the main player here. If you have it, then you will be covered for any crash that you are completely or partly at fault for, as long as you pay your deductible. If a crash was the fault of the other driver, then the damages will probably be covered through another component of your policy, even if you don’t have collision coverage.
6. If someone borrowing my car causes a crash, it won’t affect my insurance
So what happens if you lend your car to a friend and they end up in a fender bender? Well, despite what you think, they won’t necessarily be the only ones feeling the brunt of it. By handing over the keys to your car you are partially taking responsibility for anything that happens to it, even if you’re not the one behind the wheel. That means, unfortunately, you will most likely see your premium rise.
Your insurance policy should cover any damage that has occured as the result of the collision, but only if your deductible is paid. It is up to you and the person who was responsible for the incident to decide who is going to pay.
If your friend finds themselves in a severely sticky situation and your insurance premium isn't enough to cover the damage, it is the responsible driver’s responsibility to pay the rest of the damages. If the person driving your car can’t make the payment, or worse simply won’t, then the burden falls to you.
Whether your insurance will cover an incident or not depends on whether you have basic or comprehensive coverage.
7. If I don’t tell my insurer, they will never know
If you don’t tell anyone then it didn’t happen, right? Unfortunately, as much as you try and convince yourself otherwise, that isn’t the case. Just because you don’t file a claim with your insurer does not mean that an incident you’re involved in will go unnoticed. If the other driver involved in the crash decided to file a claim with their insurer, it will eventually get back to you, and then you could be paying through the nose. If you end up with a ticket after a crash, it can appear on your driving record which is accessible by your insurer.
No matter what, it is always in your best interest to be honest with your insurance provider.
8. If my car is stolen, I’ll be covered
Again, this comes down to the type of coverage you have. Comprehensive coverage will save you when it comes to theft, vandalism, fire, extreme weather and possibly even damage caused by pesky wildlife. Likewise, any valuable items left in your car are not covered if they are stolen or damaged in an accident. Think cell phones, sporting equipment or jewellery.
9. My loyalty discount outweighs any savings I could make switching insurers
Many insurance providers offer a loyalty discount for customers who have been with them for a number of years. While you may have been loyal to your insurer for some time, your discount isn’t necessarily better than savings you could receive from a new policy. Some insurance firms will offer a first time buy rate in a bid to lure you away from your old provider. Shop around and see if you can find a cheaper rate.