1. The colour of your car affects your insurance premium
MYTH.
The colour of your car doesn’t affect your insurance premium. The make, model and year of your vehicle will be considered, but not the colour.
2. Your insurance premium will only increase after an accident
MTYH.
While your insurance premium can go up after an accident, especially if you were at fault, it’s not guaranteed to do so. If you were found not to be at fault, or if you have accident forgiveness, your premium may remain unchanged.
That said, you may notice your premium go up at renewal for a number of reasons beyond your control, such as inflation or claim rates for vehicles similar to yours.
3. Insurance companies can charge whatever they want
MYTH.
Insurance premium rates are subject to strict regulations. If you’ve noticed your premiums increasing regardless of your clean driving record, it’s likely due to factors outside your insurance company’s control. For example, inflation impacts the price of repairs and the cost of settling insurance claims. This has a direct impact on what you pay for insurance coverage.
4. My premium won’t increase if I don't make a claim
MYTH.
Even with a perfect driving record and a claims-free history you may notice the cost of your car insurance increasing. Your driving history is only one of many factors that affects your premiums. If you move to a new neighbourhood, switch jobs, or add a driver, you may see your rates increase.
Your premium could also increase due to inflation, higher repair costs, and more claims from extreme weather or theft. Modern vehicles with advanced technology like sensors and driver-assistance systems could also make repairs more expensive, which may affect premiums.
5. Parking tickets affect the cost of insurance
MYTH.
Parking tickets aren’t moving violations, so they’re not reported to insurance companies. That being said, if you have unpaid parking fines you may not be allowed to renew your driver’s license or plates until they’ve been paid.
6. Speeding tickets won’t increase my premiums
MYTH.
When an insurance company sees that you have a speeding ticket on your driving record, they may consider you a higher risk driver and increase your premium. It’s a little different for photo radar tickets (also known as a speed camera tickets) though. If you get this type of ticket, you’ll still have to pay a fine, but the fine is tied to the vehicle—not the driver—so you won’t get any demerit points and it won’t affect your premiums.
7. My insurance premiums should be similar to my neighbours
MYTH.
You and your neighbour may lead similar lifestyles, drive the same vehicle and both have clean driving records, but your premiums could still be different. For example, if you carry a lower deductible, or have more coverage, you’ll probably pay more for insurance.
8. If my friend borrows my car and has an accident, their insurance will cover it
MYTH.
Your insurance policy covers your vehicle and whoever is driving it. If you lend your car to a friend and they get in an accident, it will be your insurance policy that covers the damage. If you regularly lend your car to a friend or family member you should add them to your insurance policy as a driver to ensure you won’t be denied coverage if they were to ever get in an accident in your vehicle.
9. Incorrect information won’t affect my policy
MYTH.
Your insurance policy is designed to protect you and your assets based on your unique risk factors and driving habits. Providing inaccurate information or forgetting to disclose new details may result in a claim being denied or your policy being cancelled or terminated. So if you move, change jobs or have a new driver in the family, your insurance company needs to hear about it. Try to review your full insurance policy at least once a year to ensure it reflects your current circumstances.
By understanding these myths, you can make informed decisions about your car insurance and ensure that you have the coverage you need in case of an accident or other unexpected events.