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Factors That May Affect Your Car Insurance Rates
The amount you pay for insurance will depend on factors such as:
The type of car you drive: Many insurance companies rate makes and models of cars according to their actual claims experience, such as the cost of repairs, the rate of injury, and the likelihood that a particular car may be stolen or involved in an accident. The Insurance Bureau of Canada (IBC) has a brochure called "How Cars Measure Up." This brochure provides information on the claims experience of insurance companies, including the most popular models of passenger cars. To obtain a copy of the brochure, write to IBC, 151 Yonge Street, Suite 1800, Toronto, Ontario, M5C 2W7, call (416) 362-9528, Toll-free: 1-800-387-2880, or visit the IBC website at http://www.ibc.ca.
Your driving record: The premium you pay for car insurance also depends on your driving record. This includes at-fault accidents, the length of time you have been licensed to drive, whether or not you have taken a driver training course that your insurance company recognizes, and driving convictions (such as speeding, impaired or careless driving). Generally, your first minor conviction will have little or no impact on your rates. But if you have had a second minor conviction in the last three years, it will most likely affect your premium. If you have had at-fault accidents over the last six years and/or major, serious or a number of minor driving convictions over the last three years, your premium will be higher or your insurer may not renew your insurance. Likewise, the better your driving record, the lower your premium will be. (Impaired or Careless Driving convictions are not considered to be minor convictions, but are major convictions and will impact your insurance premium and whether you are renewed.)
How much you drive: Your car insurance premium will also be affected by how much you drive. This is because the more time you spend on the road, the higher the chances of becoming involved in a car accident. In urban areas, driving to work may include driving to a subway, bus or train station. If you live close to work, you will probably have a lower premium than someone who lives far from work or who needs to use their car for business.
Where you live: Car insurance rates are generally higher in larger urban centres. This is because there are a greater number of cars on the road, and the chances of getting into an accident are higher. Also, more cars are stolen in urban areas.
Your age: In general, mature drivers have fewer accidents than younger drivers, particularly teenagers. Drivers who are 25 years of age and over can generally buy insurance at a considerably lower cost than younger drivers.
The amount of coverage: Many people buy additional protection beyond the mandatory coverage. For example, if you buy optional Collision coverage which protects you for damage to your car regardless of who caused the accident, or Comprehensive coverage which protects you against theft, vandalism, hail or explosion, your car will be covered against any such incidences, but you will pay more.
There are also other options such as increasing your Third-Party Liability protection. All of these optional coverages will have an effect on the cost of your policy.
Your deductibles: Your deductible is the portion of a loss that you are required to pay. Your deductible can vary, depending on the type of coverage you have and the percentage of fault you are assigned in the event of an accident. There are deductibles for Collision, Comprehensive, All Perils and Specified Perils coverages.
You can also pay a lower premium by having a deductible on Direct Compensation-Property Damage (DC-PD) coverage, or raising the deductible on the over coverages.
For example, by having a higher deductible of $500, instead of $300, on Comprehensive coverage you can save about 10% off of your Comprehensive premium.
These savings are due to the fact that higher deductibles mean you pay more towards the cost of repairing your car, while your insurance company pays less toward the total cost of repair. As a result, your premium will be lower.
If you'd rather have lower deductibles, you may be able to do so if you meet certain conditions and if your company offers them, but your premium will be higher. (Recognize, however, that since Collision and Comprehensive coverage are optional coverages, your insurance company may obligate you to carry higher deductibles if you have had a lot of prior claims.)
If you have an older car, you may choose to reduce your premium further by dropping Collision and Comprehensive coverage entirely.
Note: Your insurance company cannot use rating criteria such as credit history, bankruptcy, employment status, credit card possession and residence stability, to determine how much you should pay for car insurance.
The amount you pay for insurance will depend on factors such as:
The type of car you drive: Many insurance companies rate makes and models of cars according to their actual claims experience, such as the cost of repairs, the rate of injury, and the likelihood that a particular car may be stolen or involved in an accident. The Insurance Bureau of Canada (IBC) has a brochure called "How Cars Measure Up." This brochure provides information on the claims experience of insurance companies, including the most popular models of passenger cars. To obtain a copy of the brochure, write to IBC, 151 Yonge Street, Suite 1800, Toronto, Ontario, M5C 2W7, call (416) 362-9528, Toll-free: 1-800-387-2880, or visit the IBC website at http://www.ibc.ca.
Your driving record: The premium you pay for car insurance also depends on your driving record. This includes at-fault accidents, the length of time you have been licensed to drive, whether or not you have taken a driver training course that your insurance company recognizes, and driving convictions (such as speeding, impaired or careless driving). Generally, your first minor conviction will have little or no impact on your rates. But if you have had a second minor conviction in the last three years, it will most likely affect your premium. If you have had at-fault accidents over the last six years and/or major, serious or a number of minor driving convictions over the last three years, your premium will be higher or your insurer may not renew your insurance. Likewise, the better your driving record, the lower your premium will be. (Impaired or Careless Driving convictions are not considered to be minor convictions, but are major convictions and will impact your insurance premium and whether you are renewed.)
How much you drive: Your car insurance premium will also be affected by how much you drive. This is because the more time you spend on the road, the higher the chances of becoming involved in a car accident. In urban areas, driving to work may include driving to a subway, bus or train station. If you live close to work, you will probably have a lower premium than someone who lives far from work or who needs to use their car for business.
Where you live: Car insurance rates are generally higher in larger urban centres. This is because there are a greater number of cars on the road, and the chances of getting into an accident are higher. Also, more cars are stolen in urban areas.
Your age: In general, mature drivers have fewer accidents than younger drivers, particularly teenagers. Drivers who are 25 years of age and over can generally buy insurance at a considerably lower cost than younger drivers.
The amount of coverage: Many people buy additional protection beyond the mandatory coverage. For example, if you buy optional Collision coverage which protects you for damage to your car regardless of who caused the accident, or Comprehensive coverage which protects you against theft, vandalism, hail or explosion, your car will be covered against any such incidences, but you will pay more.
There are also other options such as increasing your Third-Party Liability protection. All of these optional coverages will have an effect on the cost of your policy.
Your deductibles: Your deductible is the portion of a loss that you are required to pay. Your deductible can vary, depending on the type of coverage you have and the percentage of fault you are assigned in the event of an accident. There are deductibles for Collision, Comprehensive, All Perils and Specified Perils coverages.
You can also pay a lower premium by having a deductible on Direct Compensation-Property Damage (DC-PD) coverage, or raising the deductible on the over coverages.
For example, by having a higher deductible of $500, instead of $300, on Comprehensive coverage you can save about 10% off of your Comprehensive premium.
These savings are due to the fact that higher deductibles mean you pay more towards the cost of repairing your car, while your insurance company pays less toward the total cost of repair. As a result, your premium will be lower.
If you'd rather have lower deductibles, you may be able to do so if you meet certain conditions and if your company offers them, but your premium will be higher. (Recognize, however, that since Collision and Comprehensive coverage are optional coverages, your insurance company may obligate you to carry higher deductibles if you have had a lot of prior claims.)
If you have an older car, you may choose to reduce your premium further by dropping Collision and Comprehensive coverage entirely.
Note: Your insurance company cannot use rating criteria such as credit history, bankruptcy, employment status, credit card possession and residence stability, to determine how much you should pay for car insurance.