The internet is rampant with misconceptions about auto insurance, and it’s easy to get confused by all the conflicting information. Separating fact from fiction will help you make more informed decisions when shopping for auto insurance. Don’t let these common myths prevent you from getting the best coverage that fits your lifestyle.
 

1. The type of vehicle I drive doesn’t affect my auto insurance rate.

The type of vehicle you drive does affect your auto insurance rate. In Canada, insurance companies use the Canadian Loss Experience Automobile Rating (CLEAR) system to assess how likely it is that a specific vehicle will be involved in a claim and what that claim will cost. While many factors determine your auto insurance rate, driving a vehicle with a lower CLEAR ranking (indicating a lower claims risk) can potentially lead to a lower insurance rate. The Insurance Bureau of Canada offers a comprehensive ranking of claims data to show you how the most popular types of vehicles are rated for insurance.
 

2. Red vehicles are more expensive to insure.

The colour of your vehicle doesn’t influence your auto insurance rate. Your rate is calculated based on several factors, including the make, model, year, and safety features of your vehicle, your driving history, etc. – but the colour of your vehicle is not one of them¹.
 

3. If I’m issued a parking ticket, my auto insurance rate will increase.

Parking tickets don’t directly affect your auto insurance rate. While other violations such as careless driving, speeding, distracted driving, and failing to obey a stop sign will almost certainly increase your insurance rate, parking tickets won’t. That being said, if your parking violation remains unpaid after 60 days, this could impact your ability to renew your licence plate².
 

4. If my vehicle is stolen, my auto insurance policy will cover the items inside it.

Your auto insurance policy ensures that you, your passengers, and your vehicle are protected in the event of damage or loss. Unfortunately, it doesn’t cover items not attached to your vehicle (e.g., phone, wallet, laptop, etc.). Nevertheless, the good news is that these items are typically covered under your home or tenant insurance policy.
 

5. My auto insurance rate will stay the same if I move.

Since where you live is a factor that insurers consider when calculating your auto insurance rate, it’s unlikely that your rate will stay the same if you move. Not only do auto insurance rates differ by province, but they can also vary by region, city, or neighbourhood. Depending on the population density, claims history, and crime rate of the area you’re moving to, as well as your new commute to work, among other determinants, your auto insurance rate will change.
 

6. If my friend drives my vehicle and gets into an accident, my auto insurance policy won’t have to cover the claim.

If you lend your vehicle to your friend, you also lend them your auto insurance. Auto insurance follows the vehicle, not the driver. If that person is involved in a collision, your insurance policy would be used to cover any claims. Furthermore, those claims will go on your record and increase your insurance rates. It doesn’t matter if your friend has an auto insurance policy of their own with excellent coverage. That’s why you should always be cautious about who you hand your keys to.
 

7. Men pay more than women for auto insurance.

The short answer is no, not necessarily. Young male drivers (between 16 and 25) are likelier to pay more for auto insurance because they are statistically riskier to insure than young female drivers. As they grow older and more information about their driving and insurance history becomes available, male drivers' rates actually level out. Most insurers will consider a clean driving history, including claims and convictions, and whether or not you've taken driving training more important than statistical groups.
 

8. Auto insurance is cheaper if I purchase it when the weather is warmer.

There's a widespread misconception that summer is the perfect time to buy auto insurance since it's the most popular season for vehicle purchases. While winter isn't a fun time to test drive or buy a new or used vehicle, it doesn't affect auto insurance rates. The Financial Services Regulatory Authority of Ontario (FSRAO) regulates insurance companies and must approve their auto insurance rates. So even though it's warm and sunny, it doesn't mean you get a special seasonal discount.
 

9. Shopping around for auto insurance will cause my auto insurance rate to increase.

Your auto insurance rate won’t increase if you browse coverage options. It’s crucial that you shop around or use an experienced insurance broker to ensure you make the best choices for your needs. As a broker, OTIP isn’t limited to one insurance carrier, so we shop the market and work on your behalf to help you find the right coverage. Working with a broker allows you to feel confident that you’ll be treated fairly and receive personalized support on coverage options.
 

10. I must wait for my auto insurance policy’s renewal date to revise or cancel my policy.

In Ontario, you can cancel your auto insurance anytime during the policy term. However, in most cases, if you cancel your policy before your renewal date, you’ll be subject to cancellation fees. It’s important to note that because fees are based on a percentage of your premium being refunded, you’ll pay more the earlier you are in the policy term. So, while you’re not locked in until your renewal date, you can cancel your policy effective the expiry date without incurring any fees.
 
If you're a current OTIP policyholder, contact us at 1-833-615-9329 to review your existing auto insurance policy and discuss enhancing your protection with additional optional coverage. If you’re not insured with OTIP and are shopping for auto insurance, call us at 1-833-494-0085 to get a quote and receive a $20 gift card of your choice!
 

1. Insurance Bureau of Canada – How Auto Insurance Rates are Set

2. City of Toronto – Collection Process for Parking Violations