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Car insurance: 9 myths debunked

May 23, 2023

Want to know what's really influencing your auto insurance coverage and premiums? Read on to find out whether there's any truth to these 8 common myths about car insurance.

1. Your vehicle's colour affects your premium.


The colour of your vehicle has zero effect on your insurance premium. Other features such as the make, model and year of your vehicle will be considered, but not the colour. 

2. Your insurance premium always increases after an accident.


If you're found responsible for a road accident, your insurance premium could go up, but that's not a hard-and-fast rule. 

Your driving record and previous claims are only one piece of the puzzle when it comes to figuring out your auto insurance rate. Other external factors can also have an influence. To avoid major rate hikes, ask your insurer if they offer any discounts for combining your home and auto insurance, and make sure to always drive responsibly.

3. Insurance companies raise rates randomly.


Insurance companies are not allowed to increase their rates without a good reason. In fact, the insurance industry is subject to some of the strictest regulations in Canada to protect policyholders.

Even if you have an impeccable driving record, you may have noticed that your premiums have gone up in recent years. Certain factors that no one can control definitely affect your insurance premiums. In times of high inflation, your insurance premiums will go up, too. This is because inflation has a direct impact on the cost of parts and repairs, and this drives up the cost of insurance claims.

4. If you don't make any claims, your insurance premium won't change.


Even if your driving record is perfectly clean and you've never made a claim, your insurance premium could go up when it's time to renew. Premium increases aren't necessarily just related to whether you've made a claim in the past.

Insurance rates are regularly reviewed to account for various factors like inflation, past claims and statistics about vehicle owners with a similar profile to your own.

5. Parking tickets can make your insurance premium go up.


Because a parking ticket isn't considered a traffic violation, it will have zero impact on the cost of your insurance. That said, if your driving record shows that you have a number of unpaid tickets on file, you may not be able to renew your driver's licence. For this reason, it's always a good idea to pay any parking tickets you get as soon as possible.

6. Traffic violations affect your insurance.


If you get a speeding ticket, for example, your insurance company will know about it and could consider you a high-risk driver. When a speeding violation is detected via photo radar, the ticket is tied to the licence plate and mailed to the vehicle owner. That means you'll have to pay the fine, but you won't lose any points on your driving record.

7. Your auto insurance premium will be the same as your neighbour's.


Even if you and your neighbour are the same age and drive similar vehicles, your insurance company might use slightly different methods to calculate your premiums, which could affect the end result. For example, if you have a few traffic violations on your record or if you've chosen a lower deductible, your premiums could be different.

8. If I let my friend drive my car every once in while, they'll be covered by my insurance.


If you let your friend drive your car, they'll also be covered by your insurance policy. Generally speaking, an insurance policy covers the vehicle rather than the driver. That means that if your friend gets into an accident while driving your car, any damages will be covered by your insurance policy. If you regularly lend your vehicle to the same person, however, it's important to add them as a driver to your policy. If you don't, your claim could be denied if they get into an accident.

9. You need to tell your insurer about important changes in your life.


Providing your insurer with inaccurate information or forgetting to disclose new details can lead to costly gaps in coverage. Why? If we’re not aware of important changes in your life—like getting a new job, moving or having a new driver in your family—your policy may not be properly protecting you or your family members, and you may not be covered in the event of an accident. 


When it comes to car insurance, make sure to read every single clause in your policy. Disclosing all the facts and asking questions is the best way to avoid consequences that could prove costly down the road. Your insurer can help you find the best coverage for your needs.

These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Insurance cannot be held liable for them. Always use caution and speak with a qualified specialist for comprehensive, tailored advice. Certain conditions, exclusions and limitations may apply. Full details regarding your coverage can be found in your insurance policy, which always takes precedence.