Understanding the facts about car insurance in Canada is crucial to ensure that you're making the best decisions before you buy a new vehicle or sign an auto insurance policy. Here are a few of the most common myths about auto insurance that you need to be aware of:
A Speeding Ticket Will Automatically Raise My Insurance Rates:
Fact: A speeding ticket won't necessarily raise your insurance rates, but your insurer can impose a surcharge on your premiums for any convictions you have. Convictions (especially repeat convictions) are seen by your insurer as an indicator of your poor driving habits - which makes you a higher risk to insure. Each insurer has their own guidelines, and surcharges can vary depending on the offence. What's the best way to keep your insurance costs down? Follow traffic laws, including speed limits; it makes the roads safer for everyone and will keep your car insurance premiums as low as possible.
My Insurance Premiums Are High Because I Have Parking Tickets.
Fact: While parking tickets are a hassle and an unnecessary expense for you, your insurance company isn't concerned with how many you have, and they don't affect your insurance rates. Parking tickets and other violations that aren't committed while operating your vehicle do not have a direct impact on your insurance premiums, since they don't indicate risky driving habits. However, if you don't pay your tickets you will have difficulty renewing your registration and your driver's license. And if your license is suspended it will affect your insurance premiums.
If I'm in an accident that the police determine wasn't my fault, I won't have to pay the deductible on my insurance claim.
Fact: While the police have the authority to decide if you are criminally responsible for a crash, when it comes to your insurance claim the decision resides with your insurance company. Your insurance company will investigate the accident and make their own ruling about who was at fault - which will ultimately decide whether you have to pay your deductible.
If I don't make a claim after an accident my insurance rates won't go up.
Fact: Making a claim after an accident is only one piece of the puzzle. If the police charge you for breaking traffic laws that cause the accident, your premiums can be affected. Or, if another person involved in the accident makes a claim, your insurance rates could increase as a result of the other person's claim. Talk to your insurance professional about whether an accident will affect your premiums - they can help you work through the process and may have suggestions on how to keep your insurance costs down.
A small claim has less of an effect on my insurance premiums than a large claim.
Fact: For insurance claims, size doesn't matter. The size of the claim makes no difference as to whether your auto insurance rates are affected. Every at fault accident, no matter how minor, has a negative effect on your driving and insurance records and subsequently your insurance rates.
My car colour and style (2-door vs 4-door) will affect my premiums.
Fact: Your insurance is based on the model and year of your car, not the colour. Whether your car is a 2-door or 4-door could have an effect on the rate. Insurance premiums are based on market value, average repair costs, theft frequency, and claims history of a particular vehicle. If you are planning to purchase a new vehicle and you're concerned about your possible insurance premiums, get a few car insurance quotes to see what your rates will be on different vehicles with your driving record. Then when you've narrowed down your choice of vehicles you can search for competitive auto insurance quotes to further reduce your premiums.
Once you understand the facts about auto insurance, you need to shop around for car insurance rates. You wouldn't hesitate to comparison shop when purchasing a big ticket item for your home, and your insurance premiums can also be a significant annual expense. Car insurance companies can be highly competitive with rates - and they encourage you to shop and compare. Even if you have a perfect driving record, shopping around for rates could net you significant savings.