Insurance Myths: Part 1

Insurance

Insurance can sometimes be hard to understand, which often times can lead to the occurrence of misconceptions or incorrect statements. That is why this blog post will outline some of the most commonly believed statements about insurance that are ultimately not true.

Myth 1: It is really hard to get the insurance company to pay out on a claim.

Fact: Insurance companies pay out millions of dollars in claims every year to their policyholders. The purpose of insurance is to help you recover damages to your car, home, and/or business in the case of an insured event. Your broker can help act as a liaison between you and your claims adjuster to make the entire process easier. The claims process may take some time as the insurance company must evaluate the damages and confirm it with the policy, but be rest assured that the insurance company will pay out for legitimate claims.

Myth 2: A personal auto insurance policy will cover you and your vehicle while working.

Fact: This statement is actually untrue. A personal auto insurance policy will only cover you and your vehicle for personal use, such as commuting to and from work and other places. However, using your vehicle for business purposes, such as travelling to clients’ homes or places of work, transporting goods/equipment, etc. will NOT be covered by your personal auto insurance policy. Instead, getting a commercial auto insurance policy will protect you and your vehicle in the case of an accident.

Myth 3: The colour of your car will affect your auto insurance premium.

Fact: Many people believe that a red car increases the price of an auto insurance premium, but that is not the case. Many things go into determining the price of your car insurance including your home address, the make and model of your car, your insurance experience, your driving history, etc. However, the colour of your car is NOT a determining factor.

Myth 4: I don't need business insurance, since I don't interact with customers/clients in-person.

Fact: This statement could not be farther from the truth. There are many features of a business insurance policy that help protect all aspects of your business operations. For example, a business insurance policy includes business property coverage, business interruption coverage, building coverage, and third-party liability coverage. Business property coverage will help cover your business equipment, furniture, and/or supplies in the case that they get damaged from an insured peril. Business interruption coverage helps cover the costs if you have to shut down your business while repairs are being made as a result of a covered event (fire, water damage, etc.). Finally, third-party liability coverage helps cover you and/or your employees in the case that you are held liable or are involved in a lawsuit for injuries to a customer or damages to a customer’s property.

Myth 5: All accidents have to be reported to a Collision Reporting Centre.

Fact: Accidents resulting in damages over $2,000 need to be reported to a Collision Reporting Centre; however, car accidents with damages under $2,000 are not required to be reported. In the case of a minor car accident with damages under $2,000, it may be in the best interests of you and the other driver to not report the accident to the insurance company. Instead you and the third party can come to an agreement to repair the damages without filing a claim. This would allow you and the third party to avoid having ‘at-fault claims’ on your insurance records, which will ultimately increase your premiums upon renewal.

Hopefully, these statements have cleared up some of the common misconceptions of what is and isn’t true about insurance. If you would like to learn more about insurance or still have some questions that you would like answered, you can always contact one of our brokers at 905-886-7277.

By Laura Parkes