The biggest automobile insurance myths, in accordance with experts

There are several explanation why insurance myths exist, said Steven Harris, licensed insurance broker and LowestRates.ca expert. “(Insurance contracts) are written in legal language and don’t always translate into everyday language,” he said. “There can be a little hurdle.”

Harris said people also often assume they’re covered against various losses or liabilities, but don’t necessarily know exactly what the policy says. Many people draw on personal experiences from family and friends and make decisions based on that, he added.

Here are a number of the commonest myths.

Red vehicles cost more to insure

The commonest query Harris faces is whether or not owning a red automobile costs more to insure. The reasons underlying this misunderstanding are many: a red automobile could make you more conspicuous to the police, the driving force might be more vulnerable to speeding or careless driving, or the colour triggers a negative psychological response in other drivers.

“There is no meaningful data or correlation to the color of your vehicle,” Harris said. “If your car is bright yellow or bright red, it does not increase your chances of suffering damage in the form of a collision or even theft.”

Instead, insurers often depend on data similar to the make and yr of the automobile and the driving force’s track record to find out the insurance rate, he said.

Comprehensive insurance means full protection

With comprehensive insurance, you might be only insured against non-collision-related damage similar to fire, theft, hail or water damage. Collision insurance might not be included. Full coverage includes each collision and non-collision damage. “If you only have comprehensive insurance, that means you’re missing the collision coverage portion,” Harris said.

Your personal insurance coverage covers ridesharing

Ride-sharing apps like Uber and Lyft offer drivers a blanket policy at some point of the automobile’s business use, said Anne Marie Thomas, director of consumer and industry relations at Insurance Bureau Canada. However, drivers need to know which insurance applies through which situation.

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“If I just drive to the grocery store, if I have an accident, my personal auto insurance will cover it,” she said. “If I’m a rideshare driver and have the app activated, the rideshare control takes effect.”

Thomas said it is vital to notify your personal auto insurer should you’re using your vehicle for business.

Moving doesn’t affect automobile insurance rates

Morgan Roberts, vice chairman of RH Insurance, said people often assume that moving won’t affect their insurance premium, nevertheless it does.

“Even if you move and the zip code happens to change, that can have a positive or negative impact on your rates,” she said. That’s because insurance firms assess risk based on areas and zip codes, which may increase or decrease your premiums.

Car insurance robotically increases whenever you make a claim

Harris says it relies on the variety of claim. If the driving force is at fault, the premium would likely increase. If it is not the driving force’s fault, the fare often stays the identical.

Comprehensive damage similar to fire or hail damage also has no impact on insurance costs, he said. “But as with anything, you should be careful about how many claims you have,” Harris said.

Traffic tickets increase insurance premiums

Morgan said people assume because it’s a ticket that it can affect the insurance premium, but that is not the case. “It’s just an expensive thing because you still have to pay for those tickets,” she said.

Likewise, a speed camera ticket won’t affect your insurance premium, but when a police officer pulls over a driver, it can affect the insurance premium, she said.