Canadian Auto Insurance Myths

Dear fellow Canadians, car insurance in our country is getting ridiculous! Depending on what province and even city you are in can drastically alter the cost of insurance and how it all works. But one thing is common across the nation, car insurance costs have gone up an average 12% this year. Why? Well, that is a more complicated question that no insurance company seems to be able to answer. However, I can dispel some common myths about car insurance in Canada.

Manufacturers put seats in coupes for cheaper insurance rates

While I wish I could possibly explain why manufacturers put super small seats in the back of sports car, it’s certainly not because of insurance premiums. Unfortunately, they do not make the costs of insuring your 600hp sports car any less.

Insurance will cover rental vehicles

Source: Uhaul

Your basic insurance policy will not cover any rental vehicles, whether they are cars, trucks or moving vans. There are options for additional coverage for this, at an additional cost but its never factored in a basic policy. Also keep in mind if you are adding this additional coverage, it will have a set maximum cost of the rental vehicle, usually $35-40,000. So don’t go thinking that sweet Corvette you rented is going to be covered under that.

Premiums drop when you turn 21/25/30

While I wish this was true, rates do not go down when you hit age milestones. They will go down as you go up in driver’s license classes, for example in Ontario going from a G1 to a G2 to a G will generally drop rates.

Cheaper cars cost less to insure

Source: Central Rapphannock Reginal Library

This is probably the most common myth that I hear. While an insurance premium is partly dependent on the value of car due to costs to repair or replace it, it doesn’t necessarily determine the entire part of the premium. But the biggest part of a premium is the amount required to pay for injuries sustained. Cheaper cars generally have less safety features than a more expensive vehicle which would have all the latest safety tech. The safer the vehicle, the less chance of injury and with that less injury costs!

Remember the best way to find out if something will affect your insurance costs is to call your agent or company and verify with them.

About Meds

Ben is widely known as the car sales guy to his friends and family. He does not work at a dealership, although he has done so in the past. He currently works in fleet in the automotive industry and is a numbers guy. He currently drives a rather boring 2017 Ford F-150 as his daily, but his passion is his 2018 Ford Mustang GT. Disclaimer: he does not work for Ford, although he is a big fan.