Common car insurance myths
6 minute read Published on Sep 12, 2025 by BrokerLink Communications
When it comes to car insurance, myths and misunderstandings are as common as traffic lights on city streets. It’s easy to get lost in a maze of hearsay and half-truths, especially when it comes to understanding what affects your premiums and what doesn’t. Today, we’re setting the record straight.
Separating car insurance facts from fiction
From red cars costing more to insure to what car insurance actually covers, there are many myths surrounding car insurance. The problem with these myths is that they mislead consumers, which can result in people making less informed decisions about their policies. That’s why we feel it’s important to dispel these myths and highlight the factors impacting your car insurance rates and coverage. So, without further ado, let’s dive into some of the most common car insurance myths:
Myth #1: Red cars cost more to insure
No. The colour of your car does not affect your insurance premium. This is a popular car insurance myth. Insurance premiums are calculated based on factors that are statistically shown to correlate with risk and the cost of claims. These factors usually include:
- Year, make, model and trim of your vehicle
- Your age, experience, and driving record
- Where you live
- How do you use the vehicle
- Your insurance coverage
- Your claims history
The colour of a car does not influence these factors and, therefore, is not considered by auto insurance companies when determining premiums. The myth about red cars, for example, being more expensive to insure is just that—a myth. What can affect your auto insurance premium is if the car has a custom paint job or other car modifications, as these can be more expensive to repair or replace.
Myth #2: Two-door cars are more expensive to insure
A two-door car isn’t automatically more expensive to insure. The number of doors doesn’t factor into your insurance rates. Just like we mentioned with the colour of your car, factors that do matter include things like your claims history, accident rates, repair costs, and any risk of theft. If a certain make or model is expensive to fix or gets stolen often, it’ll likely cost more to insure. So, whether your car has two doors or four, what really affects your premium is how risky it is for insurers to cover.
Myth #3: Car insurance is cheaper at age 25
This is also one of the biggest myths. There is no magical number where your auto insurance rates suddenly decrease. New drivers have very little driving experience, which leads to a higher chance of accidents and claims due to a lack of road experience, not age.
As most new drivers fall into the under-25 category, this has a significant impact on accidents and claim statistics for that age range. If you are a new driver over the age of 25, you may not have the same rates as someone who got their licence at 16. You will have to pay the rates of a new driver. Here's what you need to know:
Younger drivers are considered higher-risk
Statistically, younger drivers are considered high-risk drivers due to higher rates of accidents and claims. However, this has significantly more to do with driving experience than age. Most new drivers learn to drive at a young age, as people can begin learning to drive at 16 in most Canadian provinces.
According to MADD Canada, young drivers are at the highest risk when it comes to traffic deaths and injuries. Per capita, they have the most accidents compared to any other age group.
More driving experience by age 25
As long as drivers maintain a clean driving record, insurance premiums should continue to drop yearly. As such, by age 25, insurance rates have generally dropped significantly since they first began driving.
By 25, drivers typically have several years of driving experience, especially if they began driving at 16, reducing their likelihood of being involved in accidents compared to younger, less experienced drivers. Less risk means lower premiums. Nevertheless, if someone begins driving at age 25 or even 35, they would still be a new driver with zero driving experience, and their higher insurance premiums would absolutely reflect that.
Myth #4: Car insurance covers any damage, no matter what
This is false. Insurance only covers specific incidents based on the policy type and where you live. If you have a basic car insurance policy in Canada, it will only cover third-party injuries and property damage under your liability car insurance. Then, depending on what province or territory you live in, it may also cover accident benefits for yourself and your passengers and damages if you're involved with an uninsured or underinsured driver.
To be covered for damage to your own car in an at-fault accident, you must carry optional collision coverage. And for other types of damage unrelated to a collision, like theft, you must have optional comprehensive coverage.
In fact, in 2023, insurance companies in Canada paid a record-breaking $1.5 billion to cover stolen vehicle claims, according to the Insurance Bureau of Canada (IBC). So, if you only have collision coverage, your car won't be covered if it's stolen. Like we said, it all comes down to your policy type.
Myth #5: Car insurance covers my belongings if they're stolen from my car
This is false. There's a reason why you're not supposed to leave any valuables in your car. If someone breaks into your car and steals your phone, laptop, wallet, or other valuables, your auto insurance won’t cover it, because it only protects the car itself, not personal belongings inside it. However, if you have home or renters insurance, it usually covers stolen personal items, even if they were taken from your car.
Myth #6: If someone else drives my car, their car insurance pays for damages
This is false. If you let someone borrow your car and they get into an accident, your insurance will cover the damages, as long as they had your permission to drive. But here’s something to keep in mind: when you lend your car, you’re also lending your insurance coverage along with it.
Car insurance follows the vehicle, not the driver. So even if the person behind the wheel has their own policy, it’s your insurance that takes the hit if there’s an accident. That also means the claim goes on your record, not theirs, even though you weren’t the one driving.
Myth #7: Parking tickets affect my car insurance rates
This is mostly false. A single parking ticket won’t raise your insurance rates since it’s not a moving violation (like a speeding ticket). But if you rack up too many unpaid tickets and your driver's licence gets suspended, that’s a different story. A suspension goes on your driving record, which can increase your insurance premiums.
How to identify insurance misinformation online
With so much information online, it’s easy to come across misleading or downright false advice about insurance. Here’s how to spot misinformation and make sure you're getting the right facts:
Check the source
When reading something, ask yourself if the information is coming from a reputable website, like a government agency, an insurance company, or an industry group. You should always be cautious of random social media posts or blogs with no credentials. Also, sensational headlines like “Insurers Don’t Want You to Know This Trick” are often misleading or exaggerated.
Verify with multiple sources
Don’t rely on a single website or post. Cross-check the information with trusted sources like the Insurance Bureau of Canada (IBC) or your insurer’s official site.
Watch for outdated information
Insurance rules and rates are constantly changing. A blog or post from five years ago might no longer be accurate. That's why you should always look for recent sources.
If it sounds too good to be true, it probably is
If a post promises ridiculously low premiums or "loopholes" to avoid paying for coverage, it's probably misleading. Insurance doesn’t have shortcuts, so if it sounds too good to be true, it likely is.
Ask a licensed insurance professional
Finally, when in doubt, ask a licensed insurance professional, like an insurance agent or insurance broker, before making decisions based on online advice. They know the ins and outs of the insurance industry and can likely answer any insurance questions you have.
Learn more with BrokerLink
Knowledge is the key to unlocking the best insurance policy for your needs. Doing your homework, asking questions, and never hesitating to challenge a myth is crucial. Armed with the truths we’ve uncovered, you’re now better equipped to make informed decisions.
But if you still find yourself with questions surrounding other common car insurance myths, contact BrokerLink today. Our expert insurance advisors are ready to answer any questions you have. You can reach us by phone, by email, or in person at any one of our locations throughout Canada.