Some drivers believe some pretty amazing myths about their car insurance coverage. These stories get started through casual conversations where no one stops to validate certain statements that are made by well-meaning experts. Insurance companies are regulated very closely to make certain that drivers are insured against loss according to the written policy documentation provided from the insurer. Residents in Ontario can rest assured that the following myths have no basis in fact, and understanding this fact might make it easier to sleep at night.

  • Car price – The actual price paid for the vehicle does not impact the premium charged by the insurance company. All insurance premiums are determined by the cost of parts and labour required to repair a vehicle. Very expensive vehicles will require higher premiums than common cars.
  • Certain car colours – People who own red cars, or other bright colours, are not charged higher insurance premiums. The colour of the vehicle is not considered in the computation of insurance premiums.
  • Owned, financed or leased – Regardless of the ownership agreement, the cost of insurance is not affected.
  • Specific damage – Regardless of the extent of damage to the vehicle, the premium paid by the driver is not affected. Minor windshield cracks are viewed the same way a comprehensive claim is by the insurance company. Restoring the vehicle premium condition is within the terms of the insurance agreement.
  • Driver fault – If the other driver is at fault, the insurance company will not increase the insurance premium. Even when the insurance company must pay to repair the vehicle, insurance rates will not increase when another driver is at fault.
  • Unmade claims – A driver that does not file a claim following an accident, will incur a premium increase if the accident that caused the damage was the fault of the driver. Police reports are provided to insurance companies so the driver is identified and notes are made in the policy file.
  • Traffic tickets – When a driver goes to court and the judge drops the point penalty, the ticket will still be reported on the driver’s record. Any moving violations remain on the record for three years from the court date. When the driver pays a fine, the insurance company will consider this act as an admission of offence.
  • Police opinion of fault – Insurance companies will not always agree with the assignment of fault determined at the scene of the accident. When detailed police reports are provided, the insurance company can deny the claim and pursue a different determination. One standard example is when a car slides in poor weather and hits a stationary object. The police might not ticket the driver, but the insurance company will assign fault for the damage to the driver.
  • Weather – Ontario drivers must realize that all accidents that involve one vehicle are considered the fault of the driver. An insurance company assigns responsibility for damage sustained by another person’s property to be the fault of the driver behind the wheel of the moving vehicle. When thousands of other drivers are able to reach their destination safely in the same storm, the insurer will assign fault to the driver that skids and hits a pole.
  • Minor claims – The number of claims paid on a given policy will determine the impact on the premium charged when the policy is renewed. Minor claims against the policy will have the same impact as significant repair claims. If the car has been damaged in multiple incidents where the driver was not at fault for any of them, the premium charged by the insurance company might not increase very much in the new term.
  • License class – When drivers take additional training to qualify for a Class B, F, D or A driver’s license, the insurance company does not adjust the premiums charged for insuring the vehicle. All insurance rates charged in Ontario are based on the G2 or G license class.

Every driver should verify the facts concerning their car insurance coverage to prevent bad decisions. Paying claims to repair the vehicle is part of the insurance company’s role when car insurance policies have been kept in force without any lapses in coverage. While some claims are denied because of extenuating circumstances, most legitimate claims are paid according to the terms stated in the policy documentation. Policy limits must be set at appropriate levels to prevent a situation where the car is underinsured. Wise drivers will conduct an annual car insurance review with their agent to verify the coverage and remove any old vehicles from the policy.