4 myths and 4 truths about auto insurance

Does the color of your car affect your auto insurance?

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While some of us may not drive as often as we used to (due to the pandemic), it’s likely that we are still paying for auto insurance.


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There’s a lot of information (and misinformation) about auto insurance – about what affects your rate and how to switch providers. Sometimes it’s hard to tell the difference between a myth and the truth, especially when it comes to insurance.

It’s time to put these myths to bed.

Myth: You pay more for insurance if you have a red car

The insurance industry doesn’t care what color your car is. Your premium is not affected by the color of your vehicle, so go ahead and buy that red car.

Truth: The model of car you drive has an impact on your premium

When determining your premium, insurance companies take into account the make and model of the car, the cost of repairs, and the rate of theft. So, if a specific car model is more likely to be stolen, your premium may be higher.


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Myth: You can’t change insurance providers until your policy is renewed

If you are not satisfied with your current insurer, you can change it at any time during the term of your policy. In fact, the change could mean savings of hundreds of dollars per year.

Keep in mind that you may need to pay a cancellation fee, which can be a lump sum per month or a percentage of what’s left on your current policy. Whatever you decide to do, be sure to compare auto insurance rates before you make the switch. You don’t want to leave money on the table when it comes to something as expensive as auto insurance.


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Truth: Speeding Tickets Will Increase Your Insurance Rates

While this may not be an immediate increase, it will show up on your driving record. When it’s time to renew your insurance, your provider will review your driving record and likely increase your rate.

It also doesn’t have to be a big speeding ticket. Simply exceeding the posted speed limit by 15 km / h can result in a fine and affect your insurance premium.

Myth: Using your personal vehicle for work will increase your premium

This is not the case, but you should let your insurer know if you plan to use your vehicle for, for example, a carpooling or a food delivery.

While you can be covered by the rideshare company’s insurance when you are on time, it is a good idea to let your insurer know because if you are involved in a collision it can be difficult. to know which insurance company may be liable. Plus, if you don’t, you run the risk of voiding your personal insurance coverage if you use a personal vehicle for business purposes.


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There are insurance companies that cover drivers who use their personal vehicle for business purposes.

Truth: Where you live affects your insurance premium

The location is taken into account by the insurers when setting your price. If you live in an area with a high number of auto thefts or an area where the insurance company has had to pay a large number of claims, you could very well end up paying more for your coverage, even if you are safe. driver.

Myth: Parking tickets affect your premium

These tickets in your glove box won’t affect your insurance premium, but they could affect your ability to renew your driver’s license. So it’s always a good idea to stay on top of paying them.


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Truth: your driving has an impact on your premium

Generally speaking, the more often and longer you are on the road, the more likely it is that a collision will occur. The average annual mileage for Canadians is around 15,000 kilometers, so any excess could increase your premium slightly.

But the flip side is that mileage also has the power to lower your premium. With pay-as-you-go insurance, you are only billed per kilometer, giving you better price control. Likewise, if you opt for usage-based insurance and let a telematics device or app record your driving behavior, you could get a reduction on your premium for safe driving. On the other hand, if you have a history of dangerous driving, such as speeding, hard braking, or making dangerous turns, your insurance company might use that data to supplement your premium.

Lowest Rates.ca is a free, independent rate comparison website that allows Canadians to compare rates from over 75 providers for a variety of financial products, such as home and auto insurance, mortgages, and credit cards.


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Justin D. O'Neill

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