Dispels the Top Fall Car Insurance Myths

PRESS RELEASE: November 1, 2011 - Don’t be fooled by these generally believed myths about car insurance that are floating around out there; has the truth behind the rumours. They have the expert information drivers really need on what may impact insurance rates.

This autumn, learn the facts about some of the most common car insurance myths. Most drivers have heard these myths presented as fact at some point, but knowing the truth could save a lot of hassle and money. "Just because someone passes on information as though it were fact doesn’t make it so," Tammy Ezer of advises, "get the facts from a real expert before you make any judgment calls."

Commute Distance Determines Rates

Commute distance does have an impact on insurance rates, but probably not as much as most people think. Many insurance companies use a range of distances to determine how rates will be affected by commute. The three categories typically used are:

  • distances less than 5 km
  • distances between 6 and 24 km
  • distances over 25 km

All else being equal, someone who drives less than 5 km to work will likely have a different rate than someone with a 30 km commute, but a distance of 7 km and one of 20 km may not impact rates as both of these fall into the same category. Also, moving up a category only tends to impact rates by approximately 10 – 15%. Look instead at things like car thefts and accident rates where you live and of course driving record, as the major culprits in rate differences.

No Police Report, No Risk of Claim

If the police are not called to the scene of an accident and no report is filed, many people believe the danger of a claim being filed for injuries or damage has passed. The fact is that if you’re involved in an accident, you have one year to file a damage claim and two years for injury claims.

Whether because the symptoms of the injury didn’t arise until later, they didn’t notice the damage or simply that they were not aware of their rights at the scene, an injured party in an accident has time to put in a claim. It doesn’t matter if a police report was filed or not; not until two years have passed, is the risk of a claim gone.

Cyclists Don’t Need to Follow the Same Rules as Cars

Even on two wheels, the same laws of the road apply. Cyclists can be charged with a moving violation just like a car, including:

  • Failing to signal when changing lanes or turning
  • Failing to obey traffic signs and lights
  • Illegal turns and lane changes

The Highway Traffic Act applies to all traffic on the roads, including cyclists. A moving violation on a bike may appear on your record just like one in a car – and may have an impact on your auto insurance rate.

Accident Forgiveness Means no Repercussions

The concept of accident forgiveness is one of the selling points in insurance policies and it gives those who have it a false sense of safety from repercussions after an accident. The truth is that accident forgiveness carries plenty of fine print and conditions:

  • Accident forgiveness may not apply to incidents where serious or criminal charges are filed
  • Accident forgiveness will not follow you to a new insurance company if you switch during the six years the accident is on record
  • You don’t have accident forgiveness automatically, simply because your insurance company offers it. You may have to purchase it. This coverage could cost anywhere from $50-$100 per year.
  • Each insurance company can put their own limitations on accident forgiveness

Rental Cars are Always Covered

At the rental desk, many people waive the company’s insurance on the rental because they believe that their own insurance will cover them. In some situations this is true, but before renting it is up to the driver to verify their coverage. There are plenty of factors that can affect coverage in a rental car:

  • The policy must include full coverage in order for full coverage to be extended
  • Rental car coverage is an optional coverage that must be added to the policy usually at an extra charge
  • Where the rental car is being driven (check the rules on the country in which the car is rented if outside of Canada) determines coverage
  • There may be maximum limits on the policy that would not cover a luxury or sports car rental

In some cases rental car coverage is available through credit card benefits, but be sure to verify the limits of this coverage.

There are many myths about car insurance; recommends getting the facts from an insurance professional every time.