No matter what car you drive, how good your driving record is, or where you live, your car insurance is going to cost a fair chunk of change.
Auto insurance coverage varies by province, but there are some things drivers can do to help lower their premiums, no matter where they live.
British Columbia, Manitoba, Saskatchewan and Quebec have government-run insurance programs, although they’re all administered differently, and optional coverage may be available. In all other provinces and territories, drivers buy their auto insurance from private companies.
If you buy your own insurance, whether full or partial, the first step is to shop around. Each company assesses risk separately, so rates can vary from one company to the next. There are several ways to check prices, including simply contacting each firm. An insurance broker will find the lowest rates for you, but only among the companies he or she represents. Many drivers turn to Internet sites that check rates from a large number of companies, such as InsuranceHunter.ca, InsuranceHotline.com, and MyInsuranceShopper.ca.
Another place to check is outside traditional insurance outlets. Most Canadian banks offer car insurance in provinces that have private coverage. You can also get quotes through associations such as the Canadian Automobile Association and CARP Canada.
All provinces have mandatory items and minimum coverage requirements. In Ontario, for example, there are four that you must have: third-party liability, which covers injury or property damage to anyone you hit; accident benefits coverage, for injury expenses for you or anyone authorized to drive your car; direct compensation, which covers your vehicle when you are not entirely at fault in a collision and the other driver has insurance; and uninsured automobile coverage, which protects you if the other driver doesn’t have insurance or can’t be identified, such as in a hit-and-run.
If optional coverage is available, you may be able to save money by declining some of it, depending on your circumstances. For example, if your car is older and isn’t worth all that much, dropping the collision coverage will lower your premiums. Your rates will also come down if you increase the amount of your deductible.
However, think twice before refusing extra third-party liability. The minimum requirement is surprisingly small in most jurisdictions — just $200,000 in many — which isn’t much when someone is suing you for damages. It’s worth the peace of mind to buy at least $1 million or more.
Ask your insurance provider if there are any available discounts. You may get a break if you use winter tires, equip your car with an anti-theft device, or if young drivers have learned at an accredited driving school.
The car you drive can also affect your insurance. It’s a myth that a red sports car will automatically bump up your rates, but both private and government insurance agencies use the Canadian Loss Experience Automobile Rating, or CLEAR. This list uses data from actual insurance collision and comprehensive claims, as well as information on the cost and frequency of theft claims, to determine how likely it is that a specific vehicle will be involved in an insurance claim and, if it is, how much it will cost to repair.
Prior to CLEAR, insurance companies used the car’s selling price and basic information about repair costs to determine premiums. In most cases, this simply meant that an expensive car would cost more to insure, even though other factors could affect the cost of claims, such as depreciation, repair prices, or safety features that could reduce occupant injuries. With CLEAR, insurance companies have a more accurate determination of potential insurance costs and can set rates accordingly.
The current list covers model years 1998 to 2010, and can be found online at ibc.ca. Follow the link to “How Cars Measure Up.”
Tickets and crashes will raise your rates, of course, so watch your driving habits and avoid distraction. Most people never take any lessons beyond the minimum required to pass their initial driving test, but spending the cash for advanced driving classes, such as skid school, could be the best possible investment for lowering your premiums, as well as helping ensure your safety.
Finally, if you’ve been with your current insurance company for a long time, ask them to look over your policy for any discounts that might have been missed at your renewal. It never hurts to ask!
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