Fact or Fiction? Debunking Popular Car Insurance Myths

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Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on May 29, 2024

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated May 29, 2024

Visit author page

6 minute read

Article Contents

Is it true that older drivers are charged more for insurance? Or do flashy red cars attract higher rates? Navigating the landscape of auto insurance is tricky enough, and myths and misconceptions like these make it harder for the average Canadian to shop for insurance without worry.

Quick Article Summary:

  • Despite popular myths, things like your car’s colour and number of parking tickets don’t affect your insurance rates.
  • Insurers assess risk based on factors such as the driver’s age, gender, driving frequency, claims history, and address. 
  • Shopping for insurance can be easy and stress-free when you know what insurers prioritize when computing premium rates.

Below, we answer common questions about auto insurance and debunk some of the most pervasive car insurance myths.

Does comprehensive insurance cover all kinds of damage?

Contrary to its name, comprehensive insurance doesn’t cover everything. It only covers the cost to repair or replace any damages sustained by non-collision threats, such as:

  • Flood
  • Hail
  • Lightning
  • Windstorm
  • Fallen objects
  • Fire 
  • Explosions
  • Earthquakes
  • Animals
  • Theft or attempted theft
  • Vandalism

Comprehensive insurance doesn’t cover:

  • Damage caused to your vehicle, another driver’s vehicle, or an object (e.g. signposts, bollards, fences) in the event of a collision
  • Personal items that have been stolen from your vehicle
  • Hospital bills, medicine, and other kinds of treatment for you, your passengers, or anyone you harm in a road accident
  • Legal fees and settlement costs if you’re sued for an accident

Does your address affect your premium rates?

Yes, your address can affect your insurance premiums. Insurance rates vary across different provinces and territories. Even cities within the same province will have different rates. This is because insurers look at the risks that come with the area, including things like traffic, crime, and weather conditions. Drivers living in densely populated urban areas are likely to pay more for insurance, given the higher incidences of crime and accidents. 

Does the colour of your car impact your insurance rates?

Nope, not at all.

There’s a common misconception that red and other flashy paint jobs make cars more expensive to insure. The idea is that drivers who go for flashy cars may be more likely to engage in risky behaviours — and thus attract higher premiums. 

But despite being one of the most pervasive car insurance myths out there, this one simply isn’t true. There’s no real evidence to support the claim that red cars are more or less accident-prone than other non-neutral colours. Some studies have shown that white and yellow cars are less likely to be involved in a crash due to their high visibility, while black cars tend to have a higher accident rate. 

Regardless, insurers say they don’t consider car colour a deciding factor when calculating premium rates. Instead, they’re more interested in things like:

  • Your age
  • Gender
  • Postal code
  • Marital status
  • Car make and model
  • Driving frequency
  • Driving record
  • Claim history
  • Deductible amount, or how much you pay for claims upfront
  • Chosen coverage

There are some ways colour may indirectly affect insurance rates, though. White, black, and silver cars tend to be more popular because their neutral colours make them easier to resell. But this also creates a higher demand for these colours, making them more likely to be expensive to insure. 

Whose insurance policy covers the damages if your friend borrows your car and gets into an accident?

In general, auto insurance follows the car, not the driver. This means that if your friend uses your car and gets into an accident, your policy will cover the cost of damages, not theirs. 

However, if your friend has an OPFC 27 (Liability for Damage to Non-Owned Automobiles) endorsement, their coverage will extend to any vehicle they drive — including yours. This type of endorsement is good to have when you rent a vehicle for work or on holiday.  

Do older drivers pay more for car insurance?

This is generally untrue. In fact, younger people, particularly those under 25, face the highest insurance rates. This is because teen drivers are less experienced and more likely to engage in risky behaviours that could lead to serious accidents. 

As you age, your insurance rates will decrease as long as you maintain a good driving record.

However, this doesn’t mean that seniors will see the cheapest rates across all age ranges. Once you hit your 70s, your rates are likely to rise. This is because aging brings on certain changes that can put older drivers at risk, such as decreased reaction time, loss of visual acuity, and memory problems. Plus, older people will likely need more medical attention should they find themselves in an accident. 

Still, there are some advantages to being an older driver. Most retirees drive less frequently than younger ones and are typically more careful drivers. Since insurers put a lot of stock into one’s driving history and record, older drivers can still get a good deal on their car insurance. 

Does asking about an accident raise your rates?

There is no straightforward answer to this one, unfortunately. But the bottom line is that it’s always better to be honest about an accident.

Some people fear that asking their broker about an accident (without making a claim yet) will lead to higher premiums in the future. But while brokers aren’t required to report accidents to a person’s insurance company, that doesn’t mean they won’t. 

Plus, if you don’t report an accident to your insurance provider, they could still find out if there is another party involved and they make a claim. Your insurer could interpret this omission as failure to disclose or fraud, and that’s what can lead to a penalty.

Do parking and speeding tickets raise insurance rates?

In general, parking tickets won’t affect your car insurance premiums. However, if you leave multiple parking tickets unpaid, you run the risk of having your license suspended — which does go on your driving record. 

Speeding tickets, on the other hand, can increase your rates, especially if you’ve had more than one. 

There is one loophole for speeding tickets. Tickets from automated speed enforcement (ASE) cameras don’t affect insurance premiums because red-light cameras can’t identify drivers. 

Which traffic violations can affect my insurance rates? And for how long?

Whether or not a ticket can impact your premiums depends on the types and number of offences you’ve committed. Naturally, the more convictions you have, the riskier it is for insurers to cover you — thus higher rates.

Minor and major violations will stay on your driving record for three years from the date of your conviction, while violations leading to a license suspension can stay on your record for six years. 

Bear in mind that “date of conviction” doesn’t refer to the date you were issued a ticket. It refers to the date you either:

  •  Paid your ticket
  • Disputed your ticket and were found guilty
  • Plead guilty to the offence

Some insurers offer accident forgiveness as an add-on to your policy. With this endorsement, your first minor conviction will be forgiven and won’t make any impact on your insurance rates.

  • Speeding
  • Failure to signal before a turn or lane change
  • Failure to obey a stop sign
  • Failure to wear a seatbelt
  • Failure to provide a driving license or proof of insurance
  • Speeding over 50 km/h
  • Distracted driving
  • Failure to report an accident 
  • Speeding in a school or construction zone
  • Driving without insurance
  • Impaired driving
  • Dangerous or careless driving
  • Racing or stunt driving
  • Leaving the scene of an accident
  • Failure to stop for an officer
  • Refusal to take a breathalyzer test
  • Criminal negligence while using a motor vehicle
  • Vehicular manslaughter

Are insurance rates the same across all insurance companies?

No. In fact, insurance rates vary widely across different companies. There are many reasons for this, including:

Underwriting Criteria

Every insurance company has its own way of evaluating risks and determining who is eligible for their policies. Different companies have their specific criteria for weighing factors like the driver’s age, gender, driving history, and record. 

Coverage Options, Discounts, and Insurance Bundling

Some insurance providers may specialize in a specific type of coverage or provide discounts for things like:

  • Owning anti-theft devices
  • Having no traffic violations or accidents in  X amount of years
  • Taking a defensive driving course
  • Getting a good score on your driving test
  • Paying the full price of your policy upfront
  • Renewing your policy months before your old one expires 
  • Obtaining usage-based insurance 

Another factor that can impact your premium rates is insurance bundling. Providers that offer a diverse range of insurance (e.g., home, auto, life, and renter’s insurance) often offer multi-insurance discounts.

Financial Strength and Marketing

More established providers typically have more resources to spare, so they can take more risks in offering competitive rates. At the same time, smaller companies often charge more for their policies to stay afloat.

Similarly, well-known brands attract more customers, giving them more leverage over lesser-known providers.


As mentioned, insurance providers take things like crime rates, weather, and traffic conditions into account when computing insurance rates. Places that have higher incidences of theft, extreme weather, and congestion are more likely to result in claims. 

Why is it so hard to shop for car insurance?

If you take myths and misconceptions at face value and don’t understand what really affects premium rates, then it can feel difficult to shop for insurance. But if you know why rates differ so much, what causes them to change, and how you can find the best deals out there, it shouldn’t be a hassle. 

Comparison websites like MyChoice make insurance shopping easy. Just share your car insurance needs, compare quotes, and find the best deals all in one place.

Key Advice From MyChoice

Here are some key takeaways from MyChoice: 

  • While many car insurance myths lead consumers to believe that one factor, such as a car’s colour or a single parking ticket, can drastically affect their insurance rates, the truth about premiums is more nuanced. 
  • Factors such as a person’s age, gender, postal code, driving record, claims history, and even the provider they choose all play a key role in determining their rates. 
  • Rates vary widely across companies due to things like underwriting criteria, policy options, location, and market position. Don’t just go for the first provider you find. Shop around for the best deals — MyChoice makes it easy to compare rates from different providers in Canada.

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