Auto insurance is one of those subjects-- like the weather or gambling-- that everyone’s uncle’s cousin’s best friend knows a thing or two about. Rumours turn into legend and soon enough everyone has a trick or a loophole that they swear saved them a bundle of money... Well don’t believe everything you hear! But you can believe the following list of common auto insurance myths have been BUSTED by us, the insurance professionals at ARC Insurance.
FICTION: Parking tickets increase your insurance premiums.
Insurance companies do not take parking fines into their calculations. Unpaid fines can cause difficulties in registration or licensing, but that is separate from insurance. Remember, other traffic violations like speeding can increase your rates if you are ticketed for enough offences.
FACT: Insurers decide if you pay your deductible, not the police.
While you may not be criminally responsible for your accident, many situations can lead to you paying your insurance deductible regardless of fault. The insurer has the final say on this, not the police. An owner is not personally responsible for a hit-and-run on their vehicle, but they may still pay the deductible.
FICTION: A red car costs more to insure than a beige car.
While it is normal for auto insurance rates to vary from vehicle to vehicle, it has everything to do with what’s under the hood-- not what colour it is. Make, model, engine size and age of the vehicle are the actual, major contributors to insurance premiums.
FACT: Your vehicle is your responsibility, even if you are using it for your job.
Whether running errands for work or working out of your car, relying on an employer’s insurance is a common mistake. Commercial use of a personal vehicle can void your insurance and most employers’ insurance does not cover these situations-- even if mileage costs are being covered.
FICTION: Your friend’s insurance covers them, even if they’re driving your car.
If you are loaning your friend your vehicle, you are also loaning him or her your insurance. Any accident or liability caused while your automobile is loaned out will still be your responsibility. Consider carefully the potential costs before letting just anyone borrow your vehicle.
FACT: “Comprehensive” is just a word.
Insurance companies use a lot of fancy wording to separate different policies. No one wants to feel ripped off-- so companies rely on words like “comprehensive” to make limited coverage sound better for the money paid. In most cases in the insurance industry, comprehensive means the policy covers damage caused by events other than vehicle collisions.