By Sheryl Smolkin
Read this article and comments at Moneyville.ca
There is no doubt that escalating auto insurance payments take a big chunk out of every driver’s pay cheque. Average Ontario auto insurance rates increased 6.4 per cent from April to June of 2011, compared to the year-earlier period.
But don’t believe everything you hear about why your car insurance bill keeps increasing. A new report from TD insurance dispels the following seven urban legends about automobile insurance rates.
The colour of your car affects your insurance rate.
It doesn’t matter if your car is blue, red, striped or chequered. Your insurance rate for that make and model of car will always remain the same.
A 2-door car is more expensive to insure than a 4-door.
Not true. In fact a 4-door is often more expensive. This is because insurance companies look at the price of the car, repair costs, theft frequency and its previous claims history when determining your rate.
Getting a parking ticket means your insurance rates will go up.
Parking tickets do not count against your driving record or your insurance, but unpaid fines will affect your ability to renew your driver’s licence.
Getting a speeding ticket means your insurance rates will go up.
Not necessarily. Your first minor speeding ticket (up to 50 km/h over the speed limit) will likely not affect your insurance rate. But accumulate two or three convictions and you’ll probably be paying more to be insured. A major speeding ticket (more than 50 km/h over the speed limit) and your rates go up for sure.
A deductible does not apply if the police said the accident was not your fault.The police may have deemed you not criminally responsible for the accident, but it’s your insurance company who has the final decision as to whether you pay your deductible or not. If they investigate the accident and rule that it’s not your fault, they have the right to waive your deductible. Until then, be prepared to pay.
Your insurance premiums won’t increase unless you make an accident claim
Not true. If your insurance company finds out you were in an accident, they can raise your rates accordingly – whether you made a claim or not. You may not have told your insurance provider about the accident, but the other person in the collision may be filing a claim. His/her insurance company will likely tell your insurance company about the accident and they can raise both your rates.
The 2011 State of Insurance Report found that when it comes to making significant decisions regarding insurance products and services, almost two-thirds of Ontarians don’t go to their insurance provider, but instead ask family, friends or colleagues for advice, rely on searching the internet, or simply go with their gut.
To avoid possible costly headaches in the event of an accident, TD Insurance Chief Underwriter Henry Blumenthal encourages drivers to contact their insurers to clarify any possible misunderstandings.