10 Things That Sound True About Car Insurance But Aren't

1. No fault’ insurance means it’s not my fault: It actually means that your insurance company covers your insurance regardless of who’s fault it is. It does not mean that no one is at fault at the accident. However, someone may still be found at fault at the accident, and he/she may be hit with a higher insurance rate as a result.

2. I can’t buy a red car because they cost more to insure: The colour doesn’t matter. What matters, however, is make, model, body type, engine size, age of the car, and the records of the drivers on your policy.

 3. I’m covered under my employer’s insurance when I use my vehicle for work: Your auto insurance only covers your personal use of a car, not commercial use. So if you’re using your vehicle, say, to deliver things for your job, your workplace will not cover that.

4. If my friend drives my car and gets in an accident, it won’t show up on my insurance: In actuality, if you lend your car you also lend your insurance. So even if you were not involved in the accident, if you are the policy holder and registered owner of the vehicle, your insurance is tagged for the accident.

5. My parking tickets are going to drive up my insurance rates: Parking tickets have no correspondence to insurance rates. However, unpaid parking tickets can lead to your license being suspended, which will drive up your rates.

6. There’s no point in shopping around for insurance—they’re all the same: Car insurance companies all have their own system of rating a policy, and each weighs in different factors differently. As well, at bottom insurance companies compete for your business. Shopping around can indeed lead to a lower rate.

7. I am covered under any car I drive: See number 4—and this also includes car rentals. You can purchase insurance from the rental company, but if you do not, you may not be covered for any damage to the rental vehicle.

8.  I am covered anywhere I go: Canadian insurance companies will cover you everywhere in Canada and the United States, but not if you cross into places like Mexico, in such cases you will need to purchase separate car insurance.

9. My rate will go up if I get into an accident: Indeed, if you are at fault in an accident, and don’t have no-fault insurance, your rate will go up. However, rates go up for other reasons as well, which may not correspond at all to a given accident. Rates are adjusted periodically to keep up with statistics that apply to your situation (age, driver history, vehicle type, etc).

10. Comprehensive coverage protects me in all situations: Comprehensive insurance is one among a number of different types of protection. It covers only for damage caused by an event other than a collision.