CAR INSURANCE - Tips & Myths

As an insurance broker, it’s interesting to hear from consumers what they think are facts about car insurance; often times some things considered factual are actually myths and sometimes half-truths. Here are a few that I hope will increase your car insurance knowledge.

Tip #1: When you rent a vehicle and choose to use your own insurance policy for the collision damage waiver, note that only the drivers listed on your policy are covered. So if you are renting a vehicle and adding a second driver, who is not on your policy, you should purchase the insurance from the rental company.

Tip #2 – An accident you have with a rental vehicle will show up on your auto insurance history (autoplus) report. While your current insurance may not be aware of the accident or even be involved in the claims process at all, it will be reported as “Other claim(s) involving individual” and may show up when you show for new insurance. How? It follows your driver’s license number.

Tip #3 – Tickets received outside of the province will show up on your motor vehicle record (MVR). Ontario has a reciprocating agreement with many US states to report infractions. Also tickets stay on your record for 3 years from the date of conviction. So if you got a speeding ticket in June 2012, and you went to court in May of 2013 and charges were reduced, rather than thrown out, then it will be May of 2016 before it comes off your record.

Tip #4 – When you purchase Third Party liability and mandatory accident benefits coverage only, if you car is hit while parked and the responsible party is not identified (hit and run) your insurance company will not cover the cost of repairs, as this would be considered a collision claim.

Tip #5 – Accidents must be report to the nearest Collision Reporting Centre – Report accidents as soon as possible to police local to the area of the accident. For example, if you live in Toronto but get into an accident in Hamilton, you must report the incident to the police in Hamilton and not Toronto. If you don’t know where the closest reporting centre is located, ask the police during your initial call to them.

DISPELLING SOME MYTHS

Myth#1 - Red cars do not cost more to insure: Colour does not matter, but size does! It also holds true that 2 door cars tend to cost more than sedans, and SUVs more than mini-vans.

Myth#2 - Leased or financed vehicles cost more to insure: Not true. The cost you pay for insurance includes but is not limited to these factors: where you live, what you use the vehicle for, your license history, insurance history, coverage purchased, number of drivers etc., but never the financing details.

Myth #3 – No demerit points means a ticket should not be considered for insurance purposes. The truth is that while most demerit points stay on your record for two years, the ticket itself stays on for three (3) years from date of conviction.  All traffic related tickets count for insurance regardless of whether you lost points or not.