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Most drivers incorrectly believe comprehensive coverage means their car insurance policy covers them for everything

Canadians Risk Being Underinsured: Majority of Drivers Fail Car Insurance Literacy Quiz

RATESDOTCA-auto-insurance-myths-false-statements

Canadians Risk Being Underinsured: Majority of Drivers Fail Car Insurance Literacy Quiz

RATESDOTCA-auto-insurance-myths-true-statements

TORONTO, Sept. 01, 2020 (GLOBE NEWSWIRE) -- RATESDOTCA finds the majority of Canadian drivers scored an ‘F’ on a recent nationwide auto insurance literacy survey, meaning that they may be at risk of overpaying for premiums or worse, be underinsured. The survey asked seven common questions that drivers consider when securing vehicle insurance and found on average almost three (2.6) out of seven questions were answered correctly, with 9 per cent of Canadians incorrectly answering every statement.

Here are some of the surprising results:

• Forty-two per cent incorrectly believe that comprehensive vehicle insurance covers everything (34 per cent knew this is false; 24 per cent did not )

• Twenty-five per cent did not think they can temporarily suspend their car insurance if they are not driving during the COVID-19 pandemic (39 per cent of Canadians correctly knew they can; 36 per cent say they did not know)

• Nearly seven in 10 drivers (68 per cent) incorrectly believe that insurance companies base premiums on the number of demerit points a driver has (just 10 per cent answered right; 22 per cent did not know)

• Thirty-eight per cent think the colour of a vehicle influences the cost of insurance (it does not)

• Most respondents (79 per cent) think an expensive or high-end car costs more to insure than an economically priced vehicle (8 per cent do not and 13 per cent did not know). High-end cars are typically more expensive to insure than less expensive vehicles although, this isn't always the case

More comforting to learn was that 78 per cent of Canadians knew that they can receive a discount on their insurance bill if they bundle their auto and home/condo insurance and more than half (57 per cent) are aware they can switch auto insurance provider before their policy is due for renewal.*

“As Canadian drivers, the more we understand about auto insurance, the more likely we will get the coverage we need at a fair price and avoid disappointment when filing a claim for damages,” says Liam Lahey, Insurance Editor, RATESDOTCA. “For example, although the name may be confusing, comprehensive insurance is an optional coverage you can add to your policy. It covers damages resulting from certain risks or perils such as theft, vandalism, and falling or flying objects but does not cover damages resulting from a collision."