How well do your clients understand their auto insurance? – Canadian Underwriter

If your clients are taking a test on auto insurance, it’s likely they would barely pass, the results of a recent survey reveal.

Rate comparison site reported last week the results of a poll of more than 1,300 Canadians with auto insurance. The poll looked at common misconceptions around how car insurance works, and on average, respondents got about 5 out of 10 questions correct.

For example, 60% of those polled believe that speeding tickets from automated speed enforcement cameras will impact their car insurance; another 16% weren’t sure. “These tickets don’t go on your driving record, so they don’t impact your insurance rate,” said in a blog post revealing the survey results.

More than half of respondents (55%) also believe that car insurance follows the person, not the car. Another 14% weren’t sure. This is false (well, sort of, the blog pointed out).

“Typically, insurance follows the vehicle, not the driver,” said. “This means other drivers who use your car are usually covered by your insurance policy, and vice versa. However, if you have an endorsement for non-owned automobile (i.e. OPCF 27), it means your insurance follows you, the driver, for any vehicle you drive.”

Other survey results include:

  • 56% believe if they demonstrate bad driving behaviours such as speeding or braking suddenly while using a usage-based insurance program, their insurance rate will increase; another 30% weren’t sure. “There’s some confusion over this, and right so,” the comparison site said. “The reality is it depends on the insurance provider and their UBI program. If you consistently demonstrate poor driving behaviours, you could see your rates increase. However, not all programs negatively impact your premiums.”
  • Nearly half (44%) believe their car insurance rates only go up if they make a claim. Insurers look at many different factors when determining rates, like where you live or your car make and model. If they see more risk in your area, or for your car type, your rate can change.
  • Three-quarters (72%) understood they need to notify their insurer about using their car for ridesharing or deliveries. “You need to speak with your insurer about any changes to your car usage,” said. “If you’re using your car for ride sharing and haven’t disclosed this to your insurer, you risk not being covered.”
  • Two-third (665) believe their postal code affects their car insurance rate. Rates are generally higher in more densely populated areas because there’s more risk of collision and theft.

Feature image by Pimpisarn