From an old myth that red cars cost more to insure to the one about rates dropping when you turn 25; there are many myths that surround the insurance industry. And these are easy to rob you if you are not aware about the facts. Check out the following 7 insurance myths and the truths behind them.
1) Parking tickets raise your insurance premiums: Parking tickets don’t have a direct impact on your insurance rates. However, unpaid parking penalties can stand as obstruction to renew your driving license or vehicle permit in future. This can prove fatal since if you have neither a driving license nor a valid vehicle permit, no insurance company would be interested in offering you coverage.
2) A speeding ticket will take your rates up: Most companies will not increase your rates for a or two minor speeding tickets. However, if you acquire a few major tickets within a year, you can expect a huge increase in your monthly premiums. In the worst scenario, you can even receive a letter of cancellation from your insurer.
3) The color of your auto impacts insurance rates: Do black cars are prone to accidents? Or, do red cars cost more to repair? I’ve no clue about any of these. But what I know is insurance companies are colorblind. Insurance companies treat all colors the same way. They won’t demoralize you if you even if your color choice says “look at me” or “I’ve abrupt choices”.
4) Economy cars cost less to insure than luxury sedans: A luxury car would cost more to insure? Is it? Luxury cars come in real expense as they usually offer better anti-theft devices, collision avoidance and protection, cruise control and many more than the less expensive ones. Consequently, these cars have lower risk of claims and which means lower insurance rates. So a 2015 Jaguar XJ would cost much less than a Honda Civic.
5) 2-Door cars are more expensive to insure: There is a notion among the mass that 2-door cars are more expensive to insure than 4-door ones. The number of doors in your can is certainly a vital factor that determines the look of your car, but of course it’s not a factor to determine your insurance costs. While determining costs, insurance companies take into account repair costs, thefts, condition of the vehicle and and claims history. A 4-door model could cost more in premiums than the same car with 2 door.
6) Premiums increase with installing monitoring devices: Nowadays, many insurers are asking to install electronic monitoring devices in vehicles and drive within specific limits, distance, acceleration and brake force against which they offer discounts up to 25%. THough many have hugged to this, some remained fearful that maxing out the limits might force the insurer to escalate the rates. However, the truth is that provincial insurance regulators don’t allow insurers to make use of this driving data to determine insurance rates. Even if you fear that your driving data can be used in court against you, you should know the fact that nowadays there is a black box in every modern cars that continuously records your driving details. This data is easily accessible by insurance investigators.
7) You needn’t pay deductible if you aren’t at fault: The law perhaps won’t regard you as a criminal but it’s the insurance company that has the absolute authority to determine if you pay your deductible or not. Even if the insurance company declares that the accident was not your fault, you may still end up paying for the deductible - like hit and run case or of your vehicle is vandalized or stolen.
