April 6


Insurance Misconceptions and Myths

By David Cowlin

April 6, 2018

Like so many other topics these days, there is an awful lot of misinformation floating around about insurance. Well, your team is here to set the record straight. Below are five of the most popular myths and misconceptions we’ve heard:

  1. “If I’m not constantly driving below the speed limit, the insurance company will use those driving habit trackers to justify raising my rates.”

    This one is false. Your insurance company can not apply any surcharge or raise the rate of your policy based on the information they gather through their Usage-Based Automotive Insurance program. They can use the information they collect to discover cases of insurance fraud though, so be honest when you sign up for your policy. That said, the savings that come from these programs, as well as the incentive to drive safer, can make them worth considering at the very least.

  2. “I don’t want to get a red car because I don’t want to pay more money.”

    Again, false. Insurance companies use the year, make and model of your car, along with many other factors to determine the price of your policy. The colour of your car, is not one of them. While we’re on the topic of esthetics, having a two-door car as opposed to a four-door car will not affect your rate either.

  3. “What is the monthly rate for this quote?”

    This one isn’t a straight-up falsehood as much as it is a misconception. While there are some exceptions, most insurance policies are annual contacts, which means, the price you pay is based on the price of that contract. True, most insurers do provide the option to pay for your quote through monthly payments, they are by no means obligated to.

  4. “My friend was driving my car when I got into that accident, so my rate shouldn’t be affected.”

    False.If it’s your car, it’s your insurance policy. Whether you’re the one behind the wheel, or it’s your mother, your friend, your cousin, some guy you picked up off the street, your policy is the one that covers your vehicle if an accident occurs. It’s extremely important that you take some time to consider this, before you lend out your car to someone else.

  5. “If my car is stolen, my insurance will cover it.”

    This one again does not have a straight answer. If you purchased comprehensive coverage, then you would be correct in saying this. Comprehensive coverage is optional, but it can save you a lot of money in the long-run. Without it, damages not caused by a collision – such as theft, fire, vandalism, hail, etc. – will not typically be covered by your policy.

David Cowlin

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