The majority of Canadian drivers have failed a recent nationwide auto insurance literacy survey and may be at risk of overpaying for premiums or even be underinsured, says rate comparison website RATESDOTCA.

An online survey of 1,513 Canadians was conducted by Leger Marketing from August 7 to 10, 2020, using Leger's online panel. The survey asked seven common questions that drivers consider when securing vehicle insurance. The survey found that on average almost three (2.6) out of seven questions were answered correctly.

Among the results:

  • Forty-two per cent of those answering the online survey believe that comprehensive vehicle insurance covers everything (34 per cent knew this is false; 24 per cent did not know)

  • 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)

  • However, about 78 per cent of Canadians do know they can receive a discount on their insurance bill if they bundle their auto and home/condo insurance.

Better knowledge can mean better coverage

"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."