Auto insurance can seem complicated, especially when there are a lot of misconceptions about how it works. These kinds of errors can often end up costing you in the end! Here are some of the most popular myths, and the reality behind each.

Myth 1: Red cars are more expensive to insure.

The colour of the car makes no difference. The same car in a different colour will have the same rate. What does affect your rate is the year, make, model, body type, engine size, age of the car, and the drivers on your policy.

Myth 2: If you’re a young driver, shopping around for car insurance is a waste of time.

On the contrary, shopping around can save you money. While insurance rates are generally higher for younger drivers, shopping around can make a huge difference. Most insurance companies have different rates and savings, and this is also true for young drivers. Your insurance premium will depend on your age and other factors. In general, if you have a good driving record, your premium will be lower.

Myth 3: Your employer’s insurance covers you when you use your car for work.

Your auto insurance policy covers your personal use of your car, not any commercial use. So if you drive your own car for work, you have to notify your insurer, who will analyze your situation and determine if coverage is available under your policy of if you should have a commercial vehicle policy instead. You may be getting mileage costs back from your boss, but don't be surprised following an accident if you don’t have coverage.

Myth 4: Your rate will go up if you get into an accident.

Not necessarily. However, if you cause an accident, it will likely affect your premium. Keep in mind that if you do see a rate increase at any time, it may have nothing to do with your accident; insurance rates are adjusted periodically to keep up with inflation, the type and number of claims in your neighbourhood, the accident statistics for people with the same car as you, and many other factors.

Myth 5: If your friend borrows your car and wrecks it, his insurance covers it.

Actually, you should consider your insurance as part of your car. When you loan someone your car, you’re loaning your insurance with it, so consider the potential impact if they have an accident. In the event of a collision, depending on the coverage included in your policy, the damage will usually be covered by your insurer.

Myth 6: Auto insurance companies can charge what they want because auto insurance rates aren't regulated.

Auto insurance rates are actually regulated quite strictly. In Quebec, insurers must submit a copy of their rate manual after it is produced and again, in the 10 days following any modification.

For more information on Quebec regulations, visit the Autorité des marchés financiers website.

Myth 7: My rates will be similar to my neighbour's rates.

Rates are determined based on the individual, so factors such as age, driving record, and type of vehicle are considered. Each person's situation is unique, and rates will vary because of this.

Myth 8:“All perils other than collision or upset” coverage protects drivers in all situations.

All Perils other than collision or upset coverage is one type of protection available on an auto insurance policy. It only pays for loss or damage to your vehicle caused by an event other than a collision or upset, such as theft, vandalism, glass breakage or hail damage.

Myth 9: With Quebec’s no-fault insurance, you’ll never be found at fault for an accident.

Actually, Quebec’s no-fault plan only applies to bodily injury, which is covered by the Société de l’assurance automobile du Québec (SAAQ). Your private insurer, on the other hand, will take your fault into account when you claim for property damage caused in an accident. If you’re at fault, damage to your vehicle will only be covered if your policy includes collision coverage, and you will have to pay the deductible. If you’re not at fault, damage to your vehicle will be covered even if you don’t have collision coverage, and you won’t have to pay the deductible.