10 Common Myths About Auto Insurance
There are many common misconceptions about how car insurance is calculated or what factors are involved when calculating auto insurance. While many aspects go into it, there are just as many myths surrounding auto insurance. With so much information available to us, it is hard to determine what is true or not. The biggest problem with this is that these myths can cost us our real, hard-earned money and influence our decisions or cause us to make mistakes.
So before you purchase your auto insurance policy, keep reading this article to find out the real truth about your auto insurance.
Myth #1: The colour of your car affects your insurance premium
Many people believe that owning a red car will cause their insurance premium to rise. That’s untrue. All insurance companies are “colour-blind.” What matters is the make and model of your car. If you’ve purchased any flashy, red sports cars recently, that would be the reason your premiums have gone up.
That’s because the flashier the car, the more appealing it will be to car thieves. Your insurance company needs to take into account how much your vehicle will cost them to replace, as well as how much it would cost to fix it should you be involved in an accident. The more expensive your vehicle is, the higher your premiums.
Myth #2: A 2-door car has more expensive premiums than a 4-door car
There are many cases where a 4-door car can be more expensive to insure. But many 2-door vehicles are sports cars. Your insurance company will only look at the price of your vehicle, its theft frequency, and your previous claims history.
Myth #3: If you have a bad driving record, you won’t be able to get car insurance
Even if you have a bad driving record, you are still entitled to car insurance because it’s illegal to drive without it. The only variable that changes is how much it will cost you. If you’ve got several serious accidents under your belt, the chances are your auto insurance premiums will be very high.
Some insurance companies may decline to insure you, so you’ll need to look at specialist insurers as another option. If you have a terrible driving history, insurance companies see you as a bigger liability, so this is why your premiums will be higher.
Myth #4: Getting a parking ticket will cause your insurance premiums to go up faster
Another familiar myth car owners believe is that getting a parking ticket will make their insurance premiums more expensive. This is false. Parking tickets do not have any effect on your insurance premiums, nor do they affect your driving record.
Myth #5: Males pay more than females for car insurance
This is also false to an extent. Males tend to pay more than females if they are under 25, but once any driver hits above the age of 25, gender tends not to be a factor.
Myth #6: Paying higher insurance premiums means you get more coverage
Auto insurance rates vary significantly from person to person and from company to company. You might find that when you go shopping for your insurance rate and get quotes from different companies, they all differ.
Each insurance provider uses its own claims experience to calculate premiums, and each provider will have a different viewpoint on a person’s driving history and car combination. Make sure you shop around for your auto insurance and get quotes from multiple insurance providers.
Myth #7: Your car insurance policy will be locked in for a year
You can cancel your policy anytime. If you find a lower-priced auto insurance policy, you may cancel your current policy before renewal. But if you do this, you might need to pay a cancellation fee known as a “short rate” cancellation. Be sure that the savings you are getting with the new policy outweigh these costs. If not, you should wait until it’s time for renewal to cancel your auto coverage. That way, there will be no fees or penalties.
Myth #8: Having accidents and tickets on your driving record will permanently raise your insurance rates
Not every accident will raise your insurance rates. Only accidents where you were at-fault will negatively affect your driving record and premiums. If you shop around, you might find another insurance company that can forgive an accident here or there. There is also a time limit to how long an accident or ticket will affect your rates. A ticket typically affects your insurance rate for three years, while an accident can take about six years.
Myth #9: If your friend borrows your car and gets into an accident, it will not affect your insurance premiums
This is false. In Canada, your car insurance policy does not “follow the driver”; it is tied to the car itself. So the accident will be on the policyholder’s record. If you lend your car to your friend, you are also lending them your car insurance! If you routinely let your friend borrow your car, it’s best to add them to your insurance policy.
Myth #10: Your auto insurance rate will increase if you shop around
Many believe this misconception, but the truth is your auto insurance rate will not increase if you shop around for your insurance. While some companies will offer a loyalty discount for staying with them, shopping will not cause your rates to go up. In fact, as brokers, it’s part of our job to shop various insurance companies for you! So, if this fits not right with your current insurance provider, we are here to review options and help you find the best policy for you.
To learn more about the common myths about auto insurance, call Archway Insurance at 1-833-536-0529 or contact us here.