5 Surprising Facts About Car Insurance
Do you understand your car insurance? Despite that fact that you faithfully pay your premium every month, there’s probably lots you don’t know about this necessary expense. To help demystify the topic, we’ve gathered five car insurance facts that will help you better understand your coverage.
photo supplied, courtesy of guest blogging network
- Your premium can vary widely depending on your insurer. No matter which insurer you choose, you’ll have the same vehicle and the same driving history, so you should get the same car insurance coverage, right? Wrong! Your premium will vary depending on your insurer, so it’s worth collecting multiple quotes before choosing a provider. Each company you research will calculate your premium a little differently, considering different ratings and statistics. By comparing a few quotes, you’ll be able to find the best coverage for you and your car.
- You can change insurers at any time. Insurance providers change their rates regularly, so even if you do your research and compare quotes, the great deal you found last year might not be your best option anymore. That’s why you should review quotes each year before renewal – but there’s something else! You don’t actually need to wait until it’s time to renew your plan before you change insurers. While you might pay a penalty for ending your policy early, that cost could be offset if you find a much cheaper plan.
- Your rates are affected by insurance fraud. Did you know that when you’re paying your insurance bill, you’re also paying for the bad behaviour of others? Insurance fraud is such a common problem that the Insurance Bureau of Canada estimates that it costs the average Ontario driver an extra $236 each year. While it’s mostly up to insurance companies and legislators to fix this problem, you can do your part by reporting any suspected instances of fraud.
- Your insurance won’t always cover you in an accident. You probably pay for insurance for two reasons: you’re legally required to buy it, and you’re counting on it to cover you in an accident. But there are many instances in which you could invalidate your coverage – meaning you might not get the pay-out you were relying on after a collision. This could happen if you were charged with impaired driving at the scene of your accident, if you were using your car for undisclosed commercial use, or if you lied about something in your policy – like who drives your car, or where your car is regularly housed.
- You’re not legally required to buy all types of insurance. While insurance is legally required to drive a car, not all types of coverage are mandatory. For example, if you live in Ontario, you’re only required to buy Third-Party Liability Coverage, Statutory Accident Benefits Coverage, and Direct Compensation – Property Damage (DC-PD) Coverage. Any additional coverage, like collision coverage, is optional. So, for example, if your car is worth less than you’re paying for collision coverage, you might want to drop that part of your plan.
While car insurance might not seem like the most fascinating topic, the more you educate yourself on how it works, the better you’ll be able to choose the right coverage and, most importantly, save money – something we’re all interested in!
Author: Jacob Maslow
