8 Auto Insurance Myths

1. A speeding ticket means your insurance rates will go up

Most companies will not increase your insurance rates for a first time, minor speeding ticket. However, if you accumulate two or three convictions within a few years, or get a major speeding ticket (more than 50 km/h over the speed limit), and you can expect a big rate increase, or a cancellation letter from your insurer.

2. Parking tickets can increase your insurance rates

Parking tickets do not have an impact on your auto insurance rates, but unpaid parking fines could affect your ability to renew your driver’s license or vehicle permit. That would be a big problem as most auto insurers are not interested in providing coverage for a car that does not have a valid permit or is being driven by someone without a valid license. They’re just funny that way.

3. The colour of your car can impact your insurance rates

Do black cars end up in more accidents? Do bright red cars attract more speeding tickets? I have no idea, but I do know that auto insurance companies are colourblind. The insurance cost for specific makes and models of cars will always remain the same even if your colour choice says “look at me” or “I have questionable taste”.

4. 2-door cars are more expensive to insure than 4-door models

The number of doors might change the way your car looks, but it’s not a specific factor in determining your insurance cost. Insurers consider repair costs, theft frequency and previous claims history when determining your cost. A 4-door model could cost more, less, or the same to insure than the far cooler looking 2-door version of the same car.

5. You won’t have to pay your insurance deductible if the police say the accident was not your fault

You may not be deemed to be criminally responsible for an accident, but it’s your insurance company who decides if you pay your deductible. Even if the insurer rules that a claim is not your fault, you could still end up paying your deductible if it was a hit and run accident, or your car was stolen or vandalized.

6. Economy cars cost less to insure than luxury cars

Luxury cars cost more to buy, but typically offer better anti-theft devices, accident avoidance technologies and passenger protection systems than less expensive choices. As a result, many luxury models have a lower risk of claims and that translates to lower insurance rates. As a result, a Mercedes E350 could cost less to insure than a Honda Civic.

Fortunately, there are many affordably priced cars that are relatively inexpensive to insure. If you are interested in learning more, go to this page.

7. Your rates could be increased if you install a device that monitors your driving habits

If you live in Ontario or Quebec, you may be aware that some insurers are now offering electronic monitoring devices that reward you with insurance premium discounts of up to 25% if you drive within specific limits for time of day, distance, acceleration and brake force. While many people have readily adopted this new technology, others have declined out of a fear that failing to drive within the insurer’s limits will lead to increased rates. However, provincial insurance regulators don’t allow insurers to use this driving data to increase your rates, even if your driving habits fail to earn you any of the discounts offered by the device.

If you fear that this data could be used against you in court, you should know that all modern cars have a black box that continually records your driving details. This data can be accessed by accident investigators and help determine fault. Click on this link if you want to learn more about these devices and the information already being collected by your car’s black box.

8. Auto insurance costs about the same for every company

This is a huge myth that desperately needs to be busted. No two insurers are exactly alike in the way they look at all insurance rates and none can claim to offer the lowest cost in all situations. Every auto insurance company calculates rates based on their own unique claims and underwriting experience, profit expectations and marketing goals. Group discounts can also make a big difference. If you surveyed 10 different companies, expect to see huge price differences between the cheapest and most expensive.

If you are a lawyer, I invite you to test this myth. People that switch to the Home and Auto plan arranged by the Canadian Bar Insurance Association are saving up to $700 or more when compared to their previous insurer. Visit for more detail.

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