Dispelling Common Insurance Myths

Wednesday, January 11, 2012

There’s a plethora of insurance myths out there, everything from the colour of your car affects your premium, to a 2-door has more expensive insurance than a 4-door car. Here’s a list of the most common ones debunked.

The colour of your car affects your insurance rate

Everyone has heard the myth that the colour of your car affects your insurance rate. It’s a common misconception to think a white car has cheaper rates then a black car, or a blue car, but what people don’t know is that the insurance industry is colour blind. It doesn’t matter if your car is blue, red, white, black, checkered or striped, your insurance rate for that make and model will always remain the same.

 A 2-door car is more expensive than a 4-door.

This is just not true, in fact more times than not a 4-door is more expensive. This is because the insurance company will look at the cost of the car, repair costs, theft frequency, and previous claims history when determining your rate.

If my car is totaled, my insurance company will pay off what I owe on my loan or lease

This is not necessarily the case. When your car is totaled, your policy does not promise to pay off what you owe. What it does promise is to pay the actual cash value of your car prior to the accident, taking into account depreciation. You are still responsible for any outstanding amount owing.

In the end talking to a licensed insurance agent is the best way to debunk these insurance myths.