If you find auto insurance confusing, you’re not alone.
The majority of Canadians who participated in a survey from Rates.ca received a failing grade when it came to auto insurance literacy, which puts them at risk of overpaying for their premiums or being uninsured.
The survey consisted of seven questions that drivers consider when shopping for vehicle insurance; according to the findings, the average score was 2.6 out of seven, and nine per cent of respondents answered every question incorrectly.
Based on the results, 42 per cent of respondents believe comprehensive insurance covers everything—which is false, while 34 per cent knew this to be false, and 24 per cent said they did not know.
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Additionally, 68 per cent of respondents said they believed insurance premiums are based on the number of demerit points a driver has accrued—only 10 per cent knew this is not the case, while 22 per cent said they did not know.
Further, 38 per cent of respondents incorrectly believe the colour of a vehicle impacts insurance rates.
“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,” Liam Lahey, Insurance Editor for Rates.ca, said in a news release.
“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,” he continued.
Moreover, 64 per cent of those who were listed as the primary driver of an insurance policy were able to distinguish insurance facts from fiction on three or more questions. By comparison, only 44 per cent of those listed as occasional or secondary drivers were also able to do so.