Busting Popular Insurance Myths

While most of us mourn the fact that television’s Mythbusters is no longer on the air, this doesn’t mean we can’t bust (or confirm) a few myths of our own – especially ones related to cars or topics adjacent to them. Ray Blackburn, a product manager at Toyota Insurance and team lead of a crew which has a wealth of knowledge about the industry, walks us through a few of the most popular myths and misconceptions.

Let’s start with a prevalent myth, one which has been repeated for decades, rooted in what color a vehicle is painted. Good old Uncle Walt tells anyone who will listen that red cars are more expensive to insure, so that must be taken as gospel, right? Well, not so fast. “The color of a car does not influence insurance premiums,” explains Blackburn. “Although,” he grins, “The jury is still out if police are more likely to ticket red cars!”

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The latter is a prescient observation, since the number of moving violations one has on their driving record almost absolutely impacts the cost of insurance. If the cops are more apt to tag a red or yellow car than one painted silver or white, thus disproportionally affecting insurance costs on those cars, statistics will be skewed to suggest brightly coloured vehicles are harder on premiums. Myth: busted.

In a similar vein, Blackburn tells us the number of doors does not directly influence insurance premiums either. “Insurance companies rate on vehicle type based upon their loss experience with that vehicle type,” he explains. “If the insurer finds that they are paying more in loss costs for a two door version of a vehicle than a same make and model with four doors, then it is possible that they would charge a higher premium for the two door version.” In other words, two doors doesn’t directly translate to more insurance costs – but it depends if other drivers of the same two-door car have been behaving badly. Myth: plausible.

Moving to the subject of crashes, inquiring minds want to know if reporting a crash in which one was not at fault can cause a price increase of coverage. “Unfortunately, this CAN happen,” explains Blackburn. “Insurers are increasingly finding that customers who are involved in any accident, even those that are NOT their fault, have a higher likelihood of having accidents in the future that ARE their fault.” We should note that it is not entirely clear why this happens. Perhaps it is the cosmos saying a person is a magnet for mayhem, the not-at-fault driver contributed partially to the accident, or there was something else the driver could have done to avoid the accident. The biggest roadblock encountered by some about this topic is when an insurance company might account for your not-at-fault accident history in a new customer quote. It is worth pointing out that Blackburn notes charging for not-at-fault accidents is not legal in some areas. Myth: plausible

Finally, are you on the hook if someone steals yout car and damages the property of others? “Assuming that the car was truly stolen,” Blackburn says, “There is usually no liability on the part of a vehicle owner when the thief causes an accident.” However, there are a raft of variables which could tilt the tables such as if a family member simply took the car without permission or if the car was easily stolen because keys were left in plain view. Each of these scenarios could muddy the waters of insurance coverage. Same goes for negligently entrusting one’s vehicle to a person who had no business driving the car. “Each case is different and may require the assistance of an attorney to unlock the details,” according to Blackburn. In other words, if a vehicle is actually ripped off without assistance (wittingly or otherwise), then there’s a reasonable argument the damage wrought by a thief will not impact the amount of money in your wallet. Myth: busted – if your car was legitimately stolen.