Myths abound when it comes to car insurance. People know that red cars are more expensive to insure just as they know that if you have insurance you’re covered for everything. Turns out, both of these common car insurance myths are false!
While some myths are harmless, others can affect people’s behaviour and result in misunderstandings about insurance. Let’s clear up some of those myths, shall we? Here are 1- common car insurance myths and if they’re true or not.
1. A red car is more expensive to insure.
Nope, a red car is not more expensive to insure. The colour of your car has absolutely nothing to do with your insurance premiums. If your insurer asks about the colour of your car it’s not because they plan on slapping you with a surcharge for having a red car. It’s simply for identification purposes.
2. In order to get what you deserve, you need to inflate your car insurance claim.
Not only is this myth false, but it can also get you into trouble. Inflating your claim is misrepresentation and insurance fraud. If you’re caught, not only will you have to pay what you obtained fraudulently, your insurer has every right to sue.
Rather than inflate your claim, work with your broker beforehand to ensure you have the right coverage. It’s also important that you understand your protection and the claims process, which your broker can help you with.
3. If you have car insurance you’re covered for everything.
What you’re covered for depends on your individual policy and which coverages you chose. You are never covered for everything. There are always exclusions and limits on your car insurance. For example, if you just have liability coverage, you won’t be covered if someone damages your vehicle when it’s parked in a hit-and-run. You would need comprehensive coverage to cover that damage.
Work with your broker to get a car insurance policy that meets your needs and budget. They can also explain how coverage works and why even the most comprehensive policy won’t cover everything under the sun.
4. New cars are most attractive to thieves.
That seems logical, doesn’t it? But thieves aren’t attracted by the newest cars – they want vehicles that are easy to break into or have valuables on display that make it worth the effort.
5. If someone else is driving your car and they get into an accident, their insurance covers it.
No, your insurance covers accidents when your car is involved, regardless of who is driving. Your car insurance is attached to your vehicle. That means if someone else is driving your car and they get into an accident, your insurance will foot the bill.
Make sure you trust the person you’re lending the car to and that you’re prepared to deal with the consequences of an accident.
6. Personal belongings are covered in your car.
Personal belongings are covered by your personal property insurance (home, condo or renter’s insurance policy) not your car insurance. If you have personal property that is stolen, damaged or destroyed while in your vehicle, you’d need to file a claim under your property insurance.
For example, If you have golf clubs in your trunk and they’re stolen when your vehicle is broken into, these would not be covered by your car insurance.
If you have collision and comprehensive coverage on your car insurance, items that are attached to your vehicle will be covered. For example, your vehicle’s sound system, winter tires, and new seat covers would be covered – as long as you informed your insurance company of any upgrades.
7. Your car insurance covers you even if you use it for business.
This one is false. If you use your vehicle for any business use other than commuting, you need a commercial vehicle policy. Otherwise, you will likely not be covered. This includes transporting people for money, transporting employees, driving to visit clients or work sites, installing work-related equipment on your vehicle, transporting work-related equipment or goods, or making deliveries. This includes driving for Uber, Skip the Dishes and other ride-sharing or delivery companies!
8. Tickets and accidents stay on your record forever keeping your insurance premiums high.
This is another false myth. Most tickets stay on your record for three years and accidents for five or six years, depending on your insurance company. It does depend on the severity of the ticket as well. At-fault accidents are counted against you but if you’re not at fault, the accident shouldn’t affect your rates.
Some jurisdictions have laws in place that determine how long tickets and accidents stay on your record and affect your insurance premiums.
9. Insurance companies can change my policy whenever.
Insurance companies are obliged to inform you in advance of any changes. Traditionally, this is done via mailed letters although these days they may communicate via text or email as well. Your broker will also try to contact you by phone, email, or letter to inform you of changes.
That’s why it’s important that your insurance company and broker always have up to date contact information.
10. My insurance covers me for rental cars.
Rental cars are not covered unless you have a specific endorsement (add-on coverage) on your car insurance policy.
If you ever have any questions about your coverage or insurance in general – ask your broker!