How Much Do you Know About Insurance?
More than 60% of all Canadians rely on their friends, family or co workers for insurance advice. With all of the misinformation out there and on the internet, now is the best time for you to consider speaking with your insurance provider – nothing beats getting the information from the source. Unless of course you are part of the McDougall family and you are getting your advice from us!
Here is a brief question and answer quiz tackling some of the most common myths about insurance.
True or False. Red cars are more expensive to insure.
False. Although it is very popular to have a red vehicle, regardless of colour, the same car in a different colour will have the same rate. There are many factors that make up the formula for car insurance premiums, and things that do affect your rate include make, model, body type, age of the vehicle and the drivers on your policy. The rate also includes value and the likelihood it will get stolen – but not colour.
True or False. If you are under 25, there is no point in shopping around for car insurance.
False. Generally, car insurance is more expensive for younger drivers, but shopping around can make a big difference in your monthly premiums. Most insurance companies do have lower premiums for drivers 25 and older, but premiums can depend on many factors other than age. Also, most insurance companies do reward good driving records with a savings on your monthly payments, so premiums can actually go down when you turn 25.
True or False. Getting a parking ticket can affect your car insurance rates.
False. Parking tickets do not affect your premiums at all. Go ahead, double park.
True or False. If you are in a car accident, and you do not file a claim, your insurance rates will not go up.
False! Unfortunately, whether you make a claim or not, should your insurance provider be notified of the accident, your rates will increase. Many cities now have collision reporting centers attached to or part of your local police station. If you are in a fender bender and the person that you hit reports the claim, your insurance company will be notified. One of the factors used to determine your premiums is your driving record; therefore, should the other party or another insurance provider inform your company of the accident, it will affect your rates.
True or False. On home insurance, Replacement cost insurance means you will be reimbursed at today’s prices for replacing items stolen or damaged due to fire or water.
True. If you file a home insurance claim for items stolen or damaged, a standard policy will cover you for the value of the items less depreciation. As an example, for electronics purchased for $500.00 a few years ago, you may only get $100.00 if they were stolen or damaged, even if it costs you $600.00 to replace them. Most insurance companies offer a replacement value option which you can add to your home insurance policy which will cover the amount it costs to replace them today.
True or False. Life insurance is really only useful to people who have children.
False, false, false. Everyone should have a life insurance policy as part of their long term financial plan. At a minimum, it can cover funeral costs or a mortgage. The earlier you start, the more affordable your premiums can be as it is based on life expectancy, which, of course, decreases over time. And if you have assets, life insurance is a tax free way to transfer these assets to someone else.
True or False. If a contractor is injured while working on your property, you may be liable.
True. If you are considering renovations, or any other contracted work to be done on your property, it is your responsibility to ensure that the workers are covered. By protecting the workers, you are also protecting yourself. Ask to see proof of their insurance before they start work on your property.
True or False. Travel insurance is only required if you are vacationing outside of the country.
False. About 30% of travelers believe that travel insurance is only required if you are planning to vacation outside of Canada. Approximately 50% of Canadian travelers don’t even bother with it. However, if you leave travel insurance out of your vacation budget, you may be in for a very expensive surprise should you get sick or injured while travelling out of province.
If you scored perfectly, give us a call, we want to hire you! If you made any errors, call us and we can help you get the right answers and the best coverage. Call McDougall Insurance at 1-800-361-0941.