Insurance Group Claims Investments About us

Auto insurance myths – what's true and what's not?

Do you know what factors impact your auto insurance rates? What happens when a friend or relative damages your car? Have you heard red cars cost more to insure than others? There are so many questions and myths surrounding auto insurance. Let’s put a few to the test:

Myth: If a police officer says you caused a traffic accident, your rates will go up
Not necessarily. Police officers can lay charges in traffic accidents, but it’s up to the insurance adjuster or claims representative to determine fault. In some provinces it’s done based on legal precedent. In others, it’s based on the government’s guidelines, known as fault determination rules. If the adjuster determines that you’re wholly or partially at fault, your insurer may decide to adjust your premiums.

Myth: The number of car doors is the single most important factor in determining your insurance rates
No, a single feature of the vehicle won’t determine the rates you pay. Your claim history, the vehicle’s value, and the likelihood of it being stolen, are all considered by insurance companies when they calculate your rate.

Myth: Your insurance company will automatically increase your rates if you report a claim
As part of our Claims Guarantee, we’ll provide you with information to help you decide whether or not to make a claim. If you decide to pay your own claim, your premiums will not increase. However, claims with potential injuries, environmental losses, water damage or losses with legal involvement need to be reported and investigated. Depending on fault, rates may be impacted.

Myth: If you have too many parking tickets, your insurance rates will skyrocket
Parking tickets have no impact on insurance rates. They can be expensive, but your insurance company isn’t worried about them.

Myth: Auto insurance will not cover a stolen vehicle if a door was left unlocked or the keys left inside
The vehicle itself is covered by Comprehensive, All Perils and Specified Perils auto policies; however, items inside the vehicle that go missing are covered by your home insurance policy. If you don’t have a home policy, you wouldn’t be compensated for the loss of items stolen from the vehicle.

Myth: If someone borrows your car and they get into an accident, you’re responsible for the damages
If the person had your permission to drive your car, your auto policy will pay for the damages. If the damage is not fully covered by your policy, the person’s policy may cover some of the remaining costs.

Myth: If your car is stolen and the person responsible is in an accident, you’re on the hook
Courts have ruled that vehicle owners are not responsible for damages caused by the driver of a vehicle who didn’t have permission to use it. Not every scenario is this clear. In some cases, express consent is not given, but implied. Our Claims Representatives investigate each situation thoroughly to ensure your Auto policy is applied properly.

Myth: Red cars cost more to insure
There are many factors that impact your insurance rate, but colour isn’t one of them.