Shop Insurance Canada Details Common Auto Insurance Myths

March 18, 2016 - ShopInsuranceCanada.ca (Shop Insurance Canada) offers one of the most robust auto insurance quoting tool online, giving customers an easy and efficient way to find the best premium rates from over 25 of Canada's largest providers. The portal is made by industry experts who know the auto insurance market in Canada and can offer the best advice for consumers seeking to insure a vehicle.

Through Shop Insurance Canada, customers are able to be equipped with in-depth knowledge when looking for the best possible coverage to suit their individual needs. The company is warning those shopping for auto insurance to know what to expect and what dictates premium rates when trying to ensure the best deal.

Many people misunderstand the auto insurance industry, and misconceptions have arisen around coverage options and what insurers judge as criteria for deciding premium cost. Shop Insurance Canada is dispelling the most common auto insurance myths in its latest effort to arm consumers with quality industry knowledge:

Do insurance companies charge the same rates across the country?
While individual insurance providers do use the same criteria to judge premiums, companies employ different rates depending on the province and city in which the consumer resides. Providers gauge rates based on numerous criteria, among them location based data such as accident and theft rates for a region and the average premium cost of a city/province. Instead, postal codes are used to help determine the price of insurance.

Are red cars in general more expensive to insure?
Unless the red car happens to be a Ferrari, you will be paying the same auto insurance for a red car as you would for any other color of the same make, year, mileage, and other deciding factors. As Shop Insurance Canada points out, many insurance providers do not even ask what color the vehicle is when going through policy details.

Does policy cancellation due to unpaid coverage affect insurance rates?
Many believe that a missed policy payment will not mean having to pay a higher premium rate in the future. While a missed payment has nothing to do with vehicle, demographic, or location, it does show that the customer is a risk to insure. Missing payments that lead to a cancellation of a policy can lead to as much as $250 placed on the next premium, while some companies will refuse insurance if there is evidence of multiple missed payments.

Does putting a son/daughters car under a parents name bring down the car insurance premium?
While a parent in most cases will undoubtedly be "more insurable" than a novice young driver, auto insurance companies do not calculate premiums based on the owners of the vehicle. Instead, rates are decided based on who will be using the vehicle, which means the same rates will apply for the young driver whether they own the vehicle or not.

Do insurance brokers commission costs get transferred onto policy premium?
A common excuse for not using a broker is because they cost money to use. Actually, auto insurance brokers do not get paid by the client, with all costs picked up by the insurance company instead. Shop Insurance Canada points out that brokers are vital in ensuring customers have the very best deal possible, while also offering advice and guidance in the policy process.

Should all collisions be reported to the police?
Clients often think that police need to be involved in every traffic related accident. The truth is, unless there is criminal wrong doing (DUI or insurance fraud) then in many cases the police do not need to be called. There are exceptions, and every accident that results in over $2000 in damage should be reported to the police. In other cases clients should simply exchange insurance details with other parties and contact their auto insurance provider.

Do all accidents result in a higher insurance rate?
Easily one of the most common misconceptions sees clients believe all or any accident they are involved in will mean their insurance premium will be higher upon renewal. Only collisions that are deemed at-fault (in other words, the client caused the accident) will result in an increase in premium. If for example the customer is 0% at fault then their rate will remain the same or even decrease depending on other factors. If they are at-fault (even 1%) then insurance companies will increase the premium, how much a client is at-fault is irrelevant.

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