Have you heard the widespread ‘fact’ that red (or black) cars are more expensive to insure than other colours? It’s a belief that persists even though it’s a total myth!
In this article, we're here to bust these myths wide open and shine a light on the truth about car insurance. Get ready to clear up the confusion and discover how choosing the right car insurance can be a smart, accessible way to secure your financial future.
Myth 1: Red Cars Cost More to Insure
Truth: The colour of your car doesn’t affect your insurance premium. Many people believe that red cars, being more flashy or sporty, are more expensive to insure. Others cite the fact that lighter coloured cars are involved in fewer accidents as a reason.
According to Pineapple, a local car insurer, the colour of a car only accounts for about 2-5% difference in premiums, which is a very small difference compared to other factors. They say:
“While colour can affect insurance premiums, the effect is negligible. Despite myths that continue to persist, extensive studies and industry insights confirm that car colour is generally a non-factor in risk assessment.”
Instead, insurers consider factors like the make, model, age, engine size, and safety features when calculating the cost of your policy.
Myth 2: Comprehensive Insurance Covers Everything
Truth: While the term "comprehensive" might suggest total coverage, it doesn't mean you're covered for all situations.
On top of accidents, comprehensive car insurance covers incidents like theft, specific types of weather damage or vandalism. However, it doesn’t cover regular wear and tear or mechanical breakdowns.
Myth 3: Older Cars Don't Need Insurance
Truth: Many believe that if a car is older, it's not worth insuring. The truth is that older cars can still incur damages in accidents, and repairs can be costly without the right coverage.
Myth 4: A Cheaper Car Means Lower Insurance Rates
Truth: The cost of a car doesn’t always equate to cheaper insurance. While less expensive cars may have lower repair or replacement costs, they can still be expensive to insure if they lack modern safety features. Insurance companies consider factors like the car’s likelihood of being stolen, its safety ratings, and the cost of repairs, which may increase premiums even for a budget car.
Myth 5: Only Major Accidents Affect Your Premium
Truth: Even minor accidents can impact your insurance premiums. Many people think only big accidents will affect their rates, but insurers consider any incident that indicates risky driving behaviour.
Myth 6: My Insurance Covers Other Drivers of My Car
Truth: Not necessarily. Car insurance policies vary, and some might not cover other drivers unless they’re listed on the policy. If you frequently lend your car to friends or family, make sure to check your policy. In many cases, unlisted drivers may not be covered, or only limited coverage is extended to them.
Myth 7: Full Coverage Means I Don't Pay Anything After an Accident
Truth: Full coverage doesn’t mean you won’t have out-of-pocket expenses. While full coverage typically includes both liability and accident insurance, there’s often an excess. This is the amount you have to pay before your insurance kicks in.
Myth 8: My Insurance Will Cover Personal Items Stolen from My Car
Truth: Car insurance usually doesn’t cover personal items stolen from your vehicle, such as electronics or bags. While it may cover the damage done to your car during a theft, your home contents or renter’s insurance is more likely to cover personal belongings taken from inside your vehicle. It’s important to understand the distinction between the two types of policies.
Myth 9: Young Drivers Always Pay the Highest Premiums
Truth: While it's true that young drivers often pay more due to their lack of experience, there are ways to reduce premiums. Many insurers offer discounts for installing anti-theft features such as a tracking device in the car. So, while younger drivers may start with higher rates, they can take steps to bring them down over time.
We hope we’ve busted some insurance myths for you and helped you in understanding your car insurance a little better. Knowing what you’re covered (and not covered for) goes a long way in preventing nasty surprises when it comes to claims time.
And the next time someone says that red cars are more expensive to cover, now you know the truth!
