Separating insurance fact from fiction
< Back to main list
As much as drivers like to talk about how they save on gas, they also enjoy swapping insurance stories. Unfortunately, too much talk — specifically, the inaccurate kind — can generate urban legends.
Let’s admit that we’ve all shared that one story about our friend’s neighbour’s cousin-by-marriage who saved a bundle on insurance, even though we’re not sure if it’s true. Now, let’s turn to the facts:
Myth 1. Speeding ticket
My auto insurance rate will go up if I get a speeding ticket.
Fact: It may, but not for sure. Insurers have the right to surcharge you for any provincial or federal convictions related to the use or operation of a vehicle. It’s your current driving record that is most likely to dictate whether a speeding ticket impacts your rates. Rules regarding convictions can vary depending on the insurer, but in general the type of ticket you receive is what makes the difference. A minor speeding ticket (up to 49 km/h over the speed limit) would likely have a minimal impact on your insurance rate, but get a major speeding ticket (more than 50 km/h over the limit), and you’re definitely cruising for a rate increase.
Myth 2. Determining responsibility
If I’m in an accident and the police say it wasn’t my fault, I don’t have to pay the deductible on a claim.
Fact: The police may have the final say on whether or not you’re criminally responsible for an accident. Your insurance company, however, makes the final call as to whether or not you pay your deductible. In some cases, they may in fact waive the deductible.
Myth 3. Parking tickets
Accumulated unpaid parking tickets will eventually add up to an increased insurance rate.
Fact: Illegally parked cars can attract enforcement officers like bees to honey. Parking tickets, however, do not count against your driving record or your insurance rates.
Myth 4. Forgoing a claim
If I choose not to make a claim after an accident, my premiums won't increase.
Fact: Not so. If the other person in the collision files a claim, his or her insurance company may notify your insurance company — and both your rates can increase.
Insurance companies are used to dealing with accidents, and reputable companies will do their best to help keep a customer’s insurance premiums reasonable. And, really, if you’ve had an accident, you’re not alone.
Myth 5. Car colour and 2-door’s versus 4-door’s
The colour of your car and having a 2-door rather than a 4-door affects your insurance rate.
Fact: It doesn’t matter what colour your car is. The rate is based on the vehicle model and year, not on the colour. Whether your vehicle is a 2-door or 4-door doesn’t always determine whether the price is higher or lower either. Your vehicle is evaluated on factors such as purchase price, repair costs, theft frequency, stability in an accident and the claims history for that style or type of car.
Myth 6. Small claims
A small claim won’t affect my rate as much as a large one will.
Fact: It seems logical, but it’s simply not true. Remember that even if your insurance company doesn’t pay out a dime, an accident is an accident: it will affect your driving record and, consequently, your rate.
