With over 18 million registered vehicles on the road today, auto insurance is the most widely purchased of all insurance policies. Over the years I have found that many “Myths” have developed! These “Myths” are also the most frequently asked questions. The following examples apply in Canada.
Myth: “If my car is broken into – the contents are covered”
Fact : Wrong!
Most people believe everything in the car is covered through automobile insurance. Comprehensive coverage on automobile policies is one of the most frequently carried optional coverage’s, but it is limited and coverage only applies to such items specific to that vehicle such as the radio, stereo, CD, cassette player and one tape/CD. Items commonly stolen and not covered include briefcases, purses, coats, sunglasses, presents, laptop computers, tools, cell phones, sports equipment (e.g. golf clubs or skates)
How do I get coverage for these?
Home, tenant, condo, business insurance can provide theft coverage but this may be very limited also and if not insured through the same insurance company, a separate deductible will apply! Call your agent and know what is covered under your policies BEFORE not AFTER it happens to you.
Myth: “If I beat the ticket in court, I’m not at fault for the accident”
Residents of Ontario, Canada, are governed by a “no fault auto system” in which the name itself leads to confusion. Regardless of whether a ticket/charge applies (or does not), the insurance company still must determine the degree of fault for any and all vehicles. For more information, read the article on this. You’ll enjoy it and it goes into much greater detail.
Myth: “I cannot lend my car to anyone under 25 years old”.
Any person who has a valid drivers license in Ontario Canada is covered as long as they meet the conditions of their license. I won’t get into G1, G2 restrictions here just to keep it simple. Be aware however, that lending your car to a licensed driver may cost you money, if that person does not carry their own car insurance or has an “at fault” accident in your car.
Myth: “It was an Act of God or due to the weather loss”.
No fault Insurance governs Ontario Canada residents and for coverage to apply, the insurance company must determine the degree of fault. In simple terms, determination decides if it is a liability claim, accident benefit claim or whether it falls under optional coverage (if purchased) claim sections such as collision, comprehensive, underinsured motorist coverage, rental car coverage, waiver of depreciation, etc. This determines whether you are covered. Is a deductible applicable? Just to mention a few.
Myth:”Auto insurance rates keep going up….it’s a fact of life”
Auto insurance rates vary from company to company by maybe as much as even hundreds of dollars per year! All insurance rates ARE NOT the same. Each company bases its rates on it’s own experience & losses, marketing strategies, discounts available, etc. With many insurance companies available through an independent broker, you have an opportunity to save money! But, there’s more to it than getting a cheap rate. Look for…value for your money. That’s what really counts. How will a claim be handled? Is the company financially secure? How is the insurance company rated among its competitors? Can you deal with the same person all the time? Do they explain, define and answer your questions? Do they keep in touch or do they just mail you a renewal out year after year? Is the broker innovative (the insurance industry is changing rapidly). Is your broker available 24 hours a day through the Internet? These are just to name a few! Value…..is important.