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Top 10 Greatest Car Insurance Myths Exposed! - GetInsuranceQuotes.ca

May 9, 2013

Comparing and choosing a car insurance policy can be a confusing process. With all the myths surrounding the process, including the following 10, drivers can become even more easily overwhelmed.

1. A parking ticket will cause your insurance rates to rise.

Parking tickets do not make a difference to your insurance. However, leaving your parking tickets unpaid can make you unable to renew your license or can even result in a license suspension, both of which can increase insurance rates.

2. A lower deductible translates to a lower premium.

This can be a confusing aspect to many car insurance plans. For a given insurance claim, there is a portion that you agree to pay (the deductible) and your insurer pays the rest. If you agree to a higher deductible when there is a claim, your premium will be lower. This means that a higher deductible will actually translate to a lower premium.

3. A speeding ticket will cause your insurance rates to rise.

Depending on what kind of ticket it is, your rates may or may not be affected. If it's your first speeding ticket and it's minor (meaning that you were driving less than 50 km/h over the speed limit) your insurance rate might not be affected depending on your insurance provider. After two or three tickets, you will be paying an increased rate. Any major speeding ticket (defined as driving 50 km/h or more above the speed limit), even if it's your first time, will cause your rates to rise.

4. It's not necessary to compare car insurance unless you're a bad driver.

Many drivers think that it's unnecessary to shop around for car insurance unless the driver has a poor driving history. However, it's important for all drivers to compare different plans to make sure they are getting the best value for the plan they need. Also, this misconception often arises from the fact that many people think that all car insurance companies offer the same rates, but they can actually vary quite a bit and most companies have very unique policies and coverage plans.

5. If you let someone else drive your car and they get in an accident, their insurance has to pay out any claims that may result.

This is simply untrue. If you lend your car to someone, your car insurance covers damages from any accidents they may be involved in.

6. Your car insurance rates should be similar to your neighbour's.

Actually, your location is only one factor that goes into calculating your insurance rate. There are many other factors that affect your rate, including your driving and insurance history, the number of drivers currently living in your home and the type and number of vehicles you own.

7. Car insurance rates are lower for cheaper cars and higher for more expensive cars.

In a similar vein, many people think that two-door cars are more expensive to insure than four-door cars because the former are typically sportier vehicles. However, in both cases, premiums are dependent on many other factors- insurance companies look at accident and vandalism statistics, costs of repairs, theft frequency and safety ratings. This means that a cheaper car could actually cost more to insure depending on how these factors play out.

8. Insurance rates are affected by the color of a car.

Actually insurance companies don't look at the color of a car when calculating rates. For a vehicle of a given make and model, insurance rates should stay the same for different colors of that vehicle.

9. A new vehicle should automatically be covered according to your trade in's policy.

Actually, this is true, but the vehicle will only be covered for a short time. Most trade in policies require you to notify your insurance provider within a week of getting your new vehicle. To be absolutely sure, you should notify your insurer and make sure you will have ample coverage before you pick up your new car.

10. Your car insurance rate doesn't change if you move.

In calculating insurance rates, companies do consider where you live, so it is likely that your premium will change when you move. Depending on where you move to, your premium could increase or decrease.

What many of these common misconceptions prove is how important it is to compare car insurance companies and plans. This will ensure that you find a plan that provides the best coverage for the best price.

BONUS:

Myth #11 - Thieves Like to Steal New Cars


Statistics from the Insurance Bureau of Canada shows that the number of older vehicles stolen is much higher than newer models. In fact, the report also revealed that most of these stolen cars were manufactured between 1999 and 2007. This statistical data clearly destroys the claim that newer models are more likely to be stolen compared to older vehicles.
 
A professional car thief can steal a vehicle in approximately 30 seconds without a key. According to the Insurance Bureau of Canada, eight out of ten cars included on the most stolen list are not equipped with an approved electronic immobilizer. This device prevents thieves from stealing the car without the key. It also means that older vehicles are more attractive to thieves.

 

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