Common Car Insurance Myths ‐ Separating Fact from Fiction

With so many insurance stories from so many different drivers, it's important to know what's fact and what's fiction. Let’s take a closer look to find out what factors affect how cheap – or how expensive your car insurance really is.
We’re going to address some of the most common myths and facts. Why not test your knowledge – True or false?

The colour of your car affects your insurance premium.


The insurance industry is 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.

A 2-door car is more expensive to insure than a 4-door.


This is a car insurance myth. A 4-door vehicle can, in some cases, be more expensive. This is because when insurance companies determine your premium, they look at the price of the car, repair costs, theft frequency and its previous claims history.

Certain car models have higher insurance premiums than others.


Insurance companies take into account the model of a car. To determine the premium, they look at factors such as repair costs, theft, vandalism and safety ratings.
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, consider a car that is ranked low risk by the Insurance Bureau of Canada. (Because the lower the risk, the cheaper the car insurance should be.)
Learn how accidents can also impact your insurance premiums .

Your location in Canada affects your insurance premium.


In Canada, your insurance premium will differ depending on whether you live in an urban, suburban or rural area. Urban areas tend to have higher insurance rates because there are more cars on the road, therefore there is a higher frequency of accidents that occur.
If you live in an area with a high auto theft rate, you will likely be paying a higher price for your insurance. Every year, the Insurance Bureau of Canada (IBC) publishes a list of the top 10 stolen vehicles in Canada. See if your car is on the list >

If you are under 25, you will pay more for car insurance.


While age may be a factor in determining your car insurance premium, it is not the only factor. Insurance companies will also take into consideration:

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

Getting a parking ticket means your insurance premiums will go up.


Parking tickets do not count against your driving record or your insurance. Finally, a definitive answer to the age-old question, do parking tickets affect insurance? However, if you have unpaid fines, they will affect your ability to renew your driver's license.

Getting a speeding ticket means your insurance premiums will go up.


Speeding tickets usually affect your insurance premium – And depending on the severity, it may result in your insurance being cancelled at renewal.

You don't have to pay your deductible if the police said the accident was not your fault.


The police may have deemed you not responsible for the accident, however your insurance company still needs to establish whether or not you have to pay your deductible.

If you are in an accident in the U.S. your car insurance won’t protect you.


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.