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Top 10 Car Insurance Myths

Old myths about car insurance are still alive and kicking. Even though we can get to the truth with just a few clicks, people still cling to these myths and believe them to be true. To help you get ahead of the curve and debunk some of these misconceptions, we’re going to give you a list of the top 10 car insurance myths.

1. Color of your car affects your insurance: False.

 Insurance companies rate based on the year, make and model of your car, not the colour. Although this may have been true at one time, today, the colour of your car has no bearing on your insurance

2. Older cars are cheaper to insure: Partially True

This myth is that many people do not carry collision or comprehensive coverage on their older cars because they are not worth as much.  This helps lower the cost as they have less coverage on the vehicle. Also, the cost to repair the older cars tend to be less.  However your older car may not always be cheaper as insurance companies rate specifically by vehicle based on how many claims occur for that specific vehicle, and how much each claim costs.  Newer vehicles can sometimes be cheaper to insure as they have better safety features that lower the risk of being in an accident.  At the end of the day, the rating for the car is based on the specific car, not the age of the car.

3. Police Officers Determine Fault: False

Although police reports help insurers determine who is at fault, police officers themselves cannot determine who is at fault in an accident.  In Ontario fault is determined by the fault determination rules set by the Ontario government.  You can look at the determination rules here: https://www.ontario.ca/laws/regulation/900668.  Your insurance company will look at all the information that has been provided to them in order to apply a specific rule and determine fault.

4. No-Fault Insurance means its not my fault: False

No-fault insurance means you deal with your own insurance company during a claim no matter who is at fault.  This makes it easier for everyone, as you already have a relationship with your insurance company.  Your insurance company will take care of confirming coverage, arranging for your vehicle to be repaired etc, but if you are at fault in an accident, it will still go against your driving record.

5. I can only lend my car to someone over the age of 25: False

This used to be true at one point with some companies who gave more experienced drivers large discounts.  Those companies did not want inexperienced drivers driving vehicles they insured.  Today there is nothing in your auto policy in Ontario that stops you from lending your car to someone under the age of 25 and it will be covered by your policy.

6. If a friend has an accident driving my car it will go against their insurance: False

When you lend your car to someone you are also lending your insurance.  This means that any claim your friend has while driving will go against your insurance history.  Insurance follows the vehicle itself, not the driver.

7. Car insurance will also cover the contents in my car: False

Car insurance pays to repair or replace the car itself, as well as any liability you have from an accident but won’t pay to replace sunglasses, laptop, phone etc.  You would have to make a claim under your home or tenant’s insurance. 

8. All tickets affect my insurance: Partially True    

In general, most tickets you get will affect your insurance but there are a few exceptions to this rule.  Parking tickets do not affect your insurance because they aren’t related to how you drive.  The other exception to this rule is speeding tickets from speed cameras.  These won’t affect your insurance because the companies cannot prove you were the one who was driving when you got the speeding ticket.

9. Your insurance goes down when you get to 25: Generally True

Every insurance company rates drivers differently, but generally speaking, your insurance will go down when you turn 25. 

10. Collision and Comprehensive is automatically covered by my insurance: False

Collision and Comprehensive coverages are optional coverages that are available for you to purchase but not automatically included in Ontario. Collision covers damage to your own vehicle if you are at fault in an accident, single car accident or hit & run accident. Comprehensive covers claims such as fire, vandalism, theft, falling tree branches, etc. Depending on the age of your car you may decide to not insure it for collision or comprehensive.

Although insurance may be complicated we are here to simplify it for you. There are many car insurance myths that may have been true a number of years ago, but as the world changes insurance has had to adapt to the changes. We can help you decide what coverage is best for you, as well as answer questions like the ones above. Please give us a call at 905-623-4406 and one of our experienced brokers would be happy to help you. Or check out https://www.jamesinsurance.ca/auto-insurance/ to find more answers to common car insurance questions.

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