Common Car Insurance Myths ‐ Separating Fact from Fiction

This is fiction. The insurance industry is actually colour-blind. For example, a red car does not cost more to insure. In fact, it doesn't matter if your car is red, blue, black, or silver — your insurance premium is not impacted by the colour of your car.

This is also fiction. Just because you drive a 2-door car, doesn't mean you'll automatically be paying more for car insurance. A 4-door vehicle can, in some cases, be more expensive to insure. This is because when insurance companies determine your premium, they consider multiple factors like the type of car you drive (make, model, year), the price of the car, repair costs, theft rate and its previous claims history, NOT the number of doors your car has.

For example, the premium might be lower on a car that has statistically proven to be less likely to be stolen or involved in an accident. It might also be lower if the vehicle has better safety and handling characteristics or is less costly to repair.

Tip: If you are thinking about buying a new car or you have a specific type in mind, take a look at How Cars Measure Up — an analysis produced by the Insurance Bureau of Canada (IBC). You'll be able to do a comparison between different car models (based on previous statistics) and see if your potential new car may help with a lower premium. You can also check out the list of the top 10 stolen vehicles in Canada that the IBC publishes each year. It may help you choose a car with a lower risk, which should also help in reducing premium costs.

This is fact. In Canada, your insurance premium will differ depending on whether you live in an urban, suburban or rural area, and the risk associated with those areas. If, for example, you live in a town/city that's had a higher theft or accident rate, drivers living there may have to pay higher insurance rates due to the higher risk. However, this is only one factor that plays a partial role in your overall premium costs. Just because you live in a higher risk area, doesn't mean your insurance premiums will skyrocket.

• Your driving history
• The type of car you drive (make, model, year)
• What you use your vehicle for
• How many people will regularly drive the car
• Where you live
• The type of coverage you choose
• Your credit score (province-dependent)
• Industry-related factors such as markets, inflation, taxes and regulations

This is fact (depending on the type of speeding ticket you received). Speeding tickets issued by a police officer for a moving violation will stay on your driving record for 3 years, which in turn, impacts your insurance premiums. If, however, you were issued a ticket through a speed camera (or an Automated Speed Enforcement (ASE) camera), your insurance premiums won't be affected since the ticket is issued to the registered owner of the car based on the license plate captured in the photo.

This is fiction. Although the police may have deemed you not responsible for the accident, they aren't able to determine whether you need to pay your deductible or not. In fact, each province has their own set of fault determination rules that insurers are required to follow. That means your insurance company (following provincial regulations) will be the only ones establishing whether or not you have to pay your deductible.

This is fiction. Your car insurance is valid anywhere in Canada and the United States. That’s why it’s a good idea to carry your proof of car insurance (also known as your “ pink card ”) with you at all times. Depending on your coverage, you and your car should be covered if you get into an accident while in the U.S.

Tip: If you are considering a trip to the U.S. and you don't plan on driving your own car, consider purchasing the Grand Touring Solution®. This coverage will act as an extension of your own car insurance policy and will protect your rental should anything happen to it while in the U.S.