7 misconceptions about auto insurance
There are many common misconceptions about auto insurance, and not all are true. So let’s debunk fact from fiction.
1- Red vehicles cost more to insure.+
A number of factors are used to calculate auto insurance premiums. These include vehicle specs (model, year, equipment, etc.), use (mileage and where you use it), your profile (age, sex, etc.), coverage chosen and driving record).
As for colour, your insurer doesn’t take vehicle colour into account when it calculates your premium!
2- Men pay more for auto insurance than women.+
TRUE and FALSE
It all depends on the age group. According to GAA Statistics, there’s a big difference in the cost of premiums for the 16-20 age group (premium for collision coverage in 2018: $708 for men and $525 for women).
The gap narrows with each age group, with premiums almost the same for the 45-64 age group.
It’s interesting to know that the average premium directly reflects claims frequency. The greater the claims frequency, the higher the premium for collision coverage.
3- Quebec has the lowest auto insurance rate in the country. +
The average auto insurance premium in Quebec, including for material damage and bodily injury, totalled $717 in 2018*, compared to our two closest neighbours New Brunswick and Ontario, with average premiums of $867 and $1,505, respectively.
*This amount includes the premium for material damage (private insurers) and the premium for bodily injury (SAAQ).
4- Under Quebec’s no-fault plan, I’ll never be held liable for an accident I may cause. +
In Quebec, the no-fault plan applies only to Société de l’assurance automobile du Québec (SAAQ) coverage for bodily injury. This means that SAAQ doesn’t take your liability into account to compensate you.
However, that’s not the case for material damage to your vehicle. Your private insurer factors in your liability. It uses the Direct Compensation Agreement (DCA) to establish your level of liability.
5- My auto insurance policy doesn’t cover me if I cause an accident running a red light. +
If you purchased collision coverage to cover damage to your vehicle, you’ll be compensated by your insurer. However, you’ll have to pay the deductible. If you don’t have liability coverage, you’ll not be compensated for this accident.
6- I can contest my insurer’s decision to declare my vehicle a total loss. +
As a rule, your insurer declares your vehicle a total loss if the cost of repairs exceeds its value. It takes into account several factors, including the vehicle’s age, its general condition, claim-related repairs and market value.
If you disagree with your insurer’s decision, you need to document your file and negotiate a settlement with your insurer. If you can’t come to an agreement, you can also contest the insurer’s decision by arbitration or in the courts.
7- My vehicle will automatically be repaired with new parts. +
Under the standard auto insurance policy, recycled parts are used to repair vehicles.
To have your vehicle repaired with new parts, you must have purchased one of the following coverages:
- "Replacement cost" endorsement (Q.E.F. No. 43 – Change to indemnity – Option 43A – Partial loss – new parts)
- Replacement insurance (Q.P.F. No. 5)
If you didn’t purchase either coverage, you can still have your vehicle repaired with new OEM parts by paying the price difference between the recycled parts and the OEM parts.
One exception: a windshield is always replaced with a new part.
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