Posted on: 09-06-05 16:00:27
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Articles
The greatest myths about auto insurance
Insurance can be confusing at the best of times, but here are some of the most common misconceptions about auto insurance coverage in Canada.
The colour of your car affects your insurance rate.
Most people may not know it, but the insurance industry is colour-blind. It doesn't matter if your car is blue, red, silver, white, or black, your insurance rate for that make and model of car will always remain the same.
A 2-door car is more expensive to insure than a 4-door.
Not true. In fact a 4-door is often more expensive. This is because insurance companies look at the price of the car, repair costs, theft frequency and its previous claims history when determining your rate.
Getting a parking ticket means your insurance rates will go up.
If that were the case, we'd all be singing the blues. Parking tickets by themselves do not count against your driving record or your insurance, but unpaid fines could affect your ability to renew your driver's licence or worse result in a licence suspension - which will affect your rate.
Getting a speeding ticket means your insurance rates will go up.
Not necessarily. Your first minor speeding ticket (up to 50 km/h over the speed limit) will probably not affect your insurance rate. But accumulate two or three convictions and you'll probably be paying more to be insured. A major speeding ticket (more than 50 km/h over the speed limit) and your rates go up for sure.
You don't have to pay your deductible if the police said the accident was not your fault.
The police may not have deemed you criminally responsible for the accident, but it's your insurance company who has the final decision as to whether you pay your deductible or not. If they investigate the accident and rule that it's not your fault, they have the right to waive your deductible. Until then, you better be prepared to pay...
Cheaper cars cost less to insure and luxury cars more to insure.
Not necessarily. The premium you pay for your auto insurance is based on many factors including the price of the car, its repair costs, theft frequency and its previous claims history. When these factors are combined, a cheaper car could cost more to insure than a luxury model.
It doesn’t matter which insurance company I have auto insurance with, I’ll end up paying the same rate.
Not true. Auto insurance rates vary from company to company - sometimes by hundreds of dollars per year!
The last myth proves why shopping around to compare quotes is time well spent. Shop around for insurance quotes to make sure you are getting the coverage you need at the best available price.
Quote:I don't know about Canada but in the US, both of these factors did indeed affect insurance rates, although not by a huge deal.
Orginally posted by crenshaw
The colour of your car affects your insurance rate.
A 2-door car is more expensive to insure than a 4-door.
Not true. In fact a 4-door is often more expensive. This is because insurance companies look at the price of the car, repair costs, theft frequency and its previous claims history when determining your rate.
Several insurance companies have web sites for online quotes where you can select different options and watch the quote change in real-time.
I have played with such options several times, by keeping everything else the same and changing one particular attribute.
I noticed that everything else being the same, the color of the car did indeed affect insurance rates, as did the 2 dr. / 4 dr. setting.
If I remember correctly, the colors that were more expensive were - yellow, orange, red; and the ones less expensive were black, green, and other less conspicious colors.
Also, everything else being the same, 2 dr was more expensive than 4 dr.
I don't know the exact reasoning behind this, but my guess is that insurance companies have the belief (true or imagined) that an "aggressive" driver is more likely to be driving a 2 dr. bright red car, rather than the more family-oriented 4 dr. blue color car.
Of course, this is from my US insurance experience, and not Canadian.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
State Farm is present in both USA and Canada. some of their policies shold be same both sides of the border.
Currently I am going thru state farm. I really dont remember if they asked about the color. I think not.
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I once made a mistake, but I was wrong about it.
Quote:
Orginally posted by mercury6
State Farm is present in both USA and Canada. some of their policies shold be same both sides of the border.
Currently I am going thru state farm. I really dont remember if they asked about the color. I think not.
State farm in US and in Canada are two different entities. State farm in US had no problems insuring my car on my International license, but when I came to canada and exchanged my NY state license to get a G license and contacted state farm to buy insurance for my car, they gave me ridiculous reply saying that 'they are not taking any new business as of now.'
But then...thats Canada..
~M
Quote:Funny how two different people can have entirely different experiences in the same situation !
Orginally posted by manjeet444
State farm in US and in Canada are two different entities. State farm in US had no problems insuring my car on my International license, but when I came to canada and exchanged my NY state license to get a G license and contacted state farm to buy insurance for my car, they gave me ridiculous reply saying that 'they are not taking any new business as of now.'
But then...thats Canada..
~M
I was with StateFarm in the US and when I moved to Canada, they transferred my policy over without a hitch.
They also applied all the discounts I was receiving in the US.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Orginally posted by pratickm
Quote:Funny how two different people can have entirely different experiences in the same situation !
Orginally posted by manjeet444
State farm in US and in Canada are two different entities. State farm in US had no problems insuring my car on my International license, but when I came to canada and exchanged my NY state license to get a G license and contacted state farm to buy insurance for my car, they gave me ridiculous reply saying that 'they are not taking any new business as of now.'
But then...thats Canada..
~M
I was with StateFarm in the US and when I moved to Canada, they transferred my policy over without a hitch.
They also applied all the discounts I was receiving in the US.
Yeah, as I said in one of my previous posts that our perception is guided by our experiences. My perception about Canada is not too positive as I have had 'not so good' experiences here.
Last month a cop gave me a ticket for not wearing a seat belt on the back seat...can you beat that....
Well I know by law your are supposed to buckle up irrespective of what passenger seat you are occupying.....but who wears a seat belt while on the rear seat of the car?
~M
but who wears a seat belt while on the rear seat of the car?
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My family does ! Whats wrong in this . If you got a ticket when you were not following rules, How does that reflect bad about canada. You would get a ticket for most states in US too for this ?
Ignorance is not an excuse to break law , Dude !
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We will find a way or we will make one
