Car insurance costs a lot, and it can be tough to find the right coverage. An auto insurance policy is typically an annual contract, but auto insurance is a life-long commitment for as long as you own and drive a car in Canada.
Regardless of the amount you pay, you may always wonder if you are paying too much. When you have so many other expenses to consider, every penny you save counts regarding your car insurance.
Many people think insurance premiums are set in stone by the insurance company, and there is little you can do to save money. However, that is not the case. You can use several tips and tricks to lower your car insurance rates and make it more affordable for your financial situation.
Ways to lower your auto insurance costs
We already discussed five tips to save on car insurance, which include advice like bundling home insurance with an auto insurance policy and avoiding common car accidents to maintain a clean driving record. Let's explore ways to lower your auto insurance costs and save money:
Maintain a good credit record
A solid credit record has many financial benefits. Many insurance companies use your credit history to price auto insurance policies. After all, they want to ensure customers can pay their car insurance costs. Build a good credit record by paying bills on time and keeping credit balances low. You can check your credit report on a regular basis to monitor your performance and ensure the information is always accurate.
Take a defensive driving course
Taking a defensive driving course is a sign of a driver who proactively stays safe on the road. Young drivers and student drivers are especially encouraged to go to driving school to build good driving habits. Graduating from a driver training course teaches you how to drive safely in different situations and can also help lower the cost of your annual premium.
Get a green vehicle
The world is going green, and owning a green vehicle may offer special discounts. Only a handful of insurance companies offer this discount, so ask your insurance company about green discounts when shopping for car insurance. You can obtain this by purchasing a hybrid or electric vehicle !
Prepare your vehicle for the winter
Winters are long and cold in Canada, with lots of snow and ice on the roads. Driving in these conditions is especially dangerous because your car can easily slide across the ice or crash into another car or object. Many insurers offer discounts if you make your vehicle safe for the winter weather. One way to do this is by switching to winter tires during the cold months.
Insure more than one vehicle
Like how insurance companies may offer a multi-policy discount for bundling home and auto insurance, you can also get discounts by insuring multiple vehicles. Several insurance companies offer a multi-vehicle discount if you add several cars to the same policy.
Get extensive coverage for your car insurance policy
While it is mandatory for Canadian drivers to have the minimum coverage required for car insurance, it is often not enough to ensure drivers are protected in all situations. Mandatory coverage, like liability car insurance, doesn't cover theft, vandalism, fire, collision damage for at-fault drivers, or hitting an object.
We always recommend adding collision and comprehensive coverage as an additional part of your auto insurance. You get more protection in an accident and potentially a complete protection discount from your insurance company.
Ask about group insurance discounts
Some employers, associations, and professional groups offer group insurance policies through the organization. Ask your organization if they have cheaper auto insurance rates through their program.
Shop around for better car insurance deals
There are several insurance companies in the market with different policies available. We always encourage drivers to compare several quotes before making a decision. While you can change your policy anytime, you want to avoid potential penalties. You also don't want to waste money buying a policy you don't love. Comparing auto insurance rates gives you a better understanding of discounts and coverage options.
Find a suitable deductible amount
A higher deductible lowers your insurance premium. Higher premiums have lower deductibles. It's important to determine whether you want to pay more out-of-pocket when filing an insurance claim or pay a higher car insurance rate to have more insurance protection.
Let your insurer monitor your driving habits
Many insurers can monitor your driving and offer discounts if you have a good driving record. They do this by using either a wireless dongle or a mobile application. It's like getting rewards for having good grades. A good driving history, avoiding hard braking, fast acceleration, and using your phone while driving can result in more savings.
Take advantage of low-mileage discounts
Some companies offer low-mileage discounts if you drive under an annual mileage threshold. For example, some insurers require drivers to have under 12,000 kilometers per year, while other companies may require less than 15,000 kilometers annually.
You must prove your annual mileage to the insurer to get the discount. You can calculate your annual mileage and determine if you qualify for this insurance. Set your odometer to 0 at the start of the week and see how much mileage you log each week. Multiply this number by 52 weeks to get a rough estimate of your annual mileage.
Here are some tips to lower your annual mileage to potentially quality for low-mileage discounts:
- Carpool whenever possible to save on mileage, gas, and environmental emissions. Ask your family and friends if they want to head into the city together or coworkers if you are on their way to work. Take turns being the driver so everyone can save on car mileage.
- Consider taking public transportation if you have a reliable public transportation system. Public transportation is a great way to save on gas money and not drive as much.
- Walk or bike as much as possible. For example, you can walk to school or the local grocery store. Bonus points for the exercise and fresh air you get outside.
- Work from home when possible to reduce mileage on the daily commute to the office.
Do safety features on my car lower my premium?
Safety features exist for a reason - they prevent accidents from happening and ensure your car can safely manoeuvre in an emergency. Some of these features are optional add-ons you purchase when you buy a new car. While they make your purchase more expensive, you can save extra dollars when it comes to paying for your car insurance premium each month.
Here are some features that can lower your insurance:
- anti-lock brakes
- blind spot detectors
- lane departure warning sensors
- rear collision warning sensors
- adaptive cruise control
- anti-theft systems
- dash cams
- airbags
- inattentive driving monitor
- automatic collision avoidance braking
You may not need all these features in your car, but it's definitely worth looking into. Talk to your auto dealer to discuss which safety measures you want to have in your vehicle. You can also ask the dealer if they offer discounts for bundling multiple safety add-ons or negotiate prices.
Drive a safe car with low repair costs
Some cars are more expensive to maintain than others. Read the cheapest and most expensive cars to maintain in 2023 according to Autolist. Car insurance companies consider the type of vehicle you have when pricing insurance. They consider how likely the car will be stolen, how much it costs to repair or replace the vehicle, how safe it is to drive on the road and the frequency of claims of similar cars.
The Insurance Bureau of Canada publishes an annual report that analyzes statistics on the number and cost of specific claims for popular vehicle models in Canada. You can check the report to see where your vehicle stands. It is typically more expensive to purchase auto coverage for a new vehicle than an older car, and cars with expensive repair costs are also likely more expensive.
Reduce coverage on older cars
You may have older cars on their last leg and about to be replaced. You may not need to pay for extensive coverage on a vehicle you don't drive as much anymore. Cars also depreciate in value quickly, and you won't get much value out of older vehicles after an auto accident. In fact, you're more likely to get the actual cash value of the vehicle, which is about the same as the extra cost for insurance.
Some older cars, like vintage or classic cars, have separate insurance to protect the vehicle against claims and loss in an accident. A classic car is at least 12 years old with historical, cultural, or aesthetic value. Classic cars are rare or unique vehicles sought out by collectors. You may not drive these older cars often and may not need coverage year-round.
Regardless of what you consider an older car or the type of older vehicle you have, you should think about how to reduce unwanted to unneeded coverage. It helps you spend enough money on adequate insurance coverage to protect you in an accident claim.
Review your coverage
You should always review your coverage during renewal time. Circumstances may change, and you may need more or less coverage than the year before. Your financial situation may also change, and you may want to adjust your deductible amount or how much you pay for monthly premiums.
Review your policy and determine whether you want to keep the same policy or make amendments. Consider whether you want to keep the same company or switch to a different car insurance company that better suits your needs.
Speak with an insurance agent if you don't know what you want or have questions. Insurance experts can help review your current coverage and ensure you're comfortable with your renewal.
Pick only the coverage you need
While you can get a complete protection discount by having more than the minimum insurance requirement, you shouldn't buy every add-on if you don't need it. Liability coverage is mandatory, and we always recommend collision and comprehensive coverage for your policy.
You can add many additional types of auto insurance to get even more protection, such as accident forgiveness coverage. Adding more coverage to your insurance increases your premium. Think carefully about what types of coverage you need and don't need.
How much do I pay for car insurance?
Auto insurance costs vary greatly based on several factors, such as location, driving record, personal information, deductibles, car make and model, and coverage limits. Insurance providers use these factors to price premiums for each customer.
There are certain factors that may increase your insurance based on your risk factor. For example, a young driver may pay more for insurance than an experienced older driver. Individuals with more accident claims may pay more than people with fewer claims.
Larger cities typically have more expensive base car insurance rates because of the increased likelihood of accidents, higher frequency of claims, and the likelihood of other incidents, such as theft and vandalism. For example, Vaughan or Toronto car insurance typically costs more than Whitby or Orangeville insurance.
Insurance providers will look at these historical trends and statistics in addition to your personal and driving information to determine what you will pay. Shopping around for car insurance is one of the best ways to compare quotes and ensure you pay exactly what you need. Speak with an experienced BrokerLink insurance agent about how to save on car insurance in Canada.
Does my licence affect my premium?
It depends. Demerit points and other driving infractions that affect your license may not directly correlate to how much you pay. However, it definitely raises red flags if your demerit points come with a conviction. There are three categories of convictions in Ontario:
- Minor convictions include speeding, making improper turns, failing to yield to a pedestrian, failing to signal, etc.
- Major convictions include distracted driving, failure to report an accident, driving while uninsured, etc.
- Criminal convictions include racing, failure to remain at the scene of an accident, vehicle manslaughter, driving with a suspended license, etc.
You get demerit points based on the type and class of driving conviction you receive. Having too many demerit points will result in a license suspension.
Your insurance company considers the type and class of conviction on your licence to price insurance rates for you. Any class of driving conviction can raise your rates regardless of the number of points you have on your licence. Insurance companies are also not required to provide coverage if you have a suspended licence.
Which insurance coverages do I need?
There are several insurance coverages you can consider when creating your insurance policy. You may consider your driving needs, risk tolerance, financial situation, etc. You should also look at the mandatory vs. optional coverages you can get to get the policy that works for you best. Here are some insurance coverages to consider:
Third-party liability insurance
Third-party liability car insurance is sometimes called legal liability protection because it covers legal fees, lawsuit settlements, and court fees in an accident claim. It is one of the essential types of coverage all insurance companies provide for all types of policies.
Third-party liability protection covers any claims resulting from bodily injury or property damage to another person. For example, liability insurance kicks in if your vehicle collides with someone and they break their back.
Car insurance policies typically have a legally required minimum for how much third-party liability insurance coverage you must have in your policy. These minimum limits vary based on the province or territory of Canada you live in. Our auto insurance experts can help determine what these legal requirements are for you.
While it can increase your insurance costs if you purchase a higher coverage, it can be worth it if you believe you have a higher risk of an accident. For example, you are likely more at risk of needing more third-party liability insurance if you drive on the highway at night frequently, in hazardous conditions, or more often than the average person.
Comprehensive insurance
Comprehensive car coverage protects you against claims resulting from accidents that are not a collision. It covers theft, vandalism, damage from falling objects, hail, fire, etc. Comprehensive coverage helps pay to replace or repair your vehicle in these scenarios.
The difference between full coverage and comprehensive car insurance is that a full coverage policy includes comprehensive insurance in addition to liability and collision coverage. While comprehensive car insurance is not mandatory, some auto dealers require it if you lease or finance a vehicle.
You can decide how much comprehensive coverage you want by conducting a self-assessment. How likely are you to encounter road accidents that are not collisions? Do you have the budget for comprehensive insurance? Some drivers find the peace of mind they get from having comprehensive car insurance enough to add it to their policy.
Accident forgiveness
Accident forgiveness is additional coverage that you can add as an endorsement to protect your driving record if you get into an accident. It can help prevent your insurance premium from increasing even if you have an at-fault claim. Coverage varies by province.
Insurance companies typically offer accident forgiveness coverage for drivers with a clean driving record. You must be accident and claim-free for at least six years as a licenced driver. Drivers with a recent claims history likely won't have this option.
If you are worried about increasing rates after an accident and have had no claims or accidents in the last six years, you can ask about accident forgiveness insurance. To receive accident forgiveness coverage, you must have accident forgiveness in your insurance policy before an at-fault accident occurs.
Collision coverage
Collision coverage helps repair or replace your vehicle after an accident with another vehicle or object on the road, regardless of who is at fault. The difference between collision and comprehensive auto coverage is that comprehensive coverage protects you from accidents that are not collisions. One benefit of collision coverage is you don't need to wait for a payout from the other person's insurance. You can use your collision coverage to take care of your vehicle repair quickly.
Uninsured automobile insurance
Uninsured automobile insurance protects you and your passengers if you get into an accident with an at-fault driver who is uninsured or underinsured. It can also protect you in the event of a hit-and-run, where the at-fault driver is unidentified. You can get help for medical expenses, property damage, and more.
Get affordable car insurance with BrokerLink
BrokerLink makes it easy for Canadian drivers to find a policy that works for them. Our insurance experts understand the ins and outs of the car insurance industry, and we can help you find a policy tailored to your specific needs.
We work closely with you to understand your driving history, insurance concerns, and protection requirements. Then, we provide several insurance quotes to compare coverage limits and types. We also identify discounts or perks insurance companies may have, such as a good student discount or bundling more than one vehicle.
If you are also looking for home, business, pet, or recreational items insurance, we can also help you find the best coverage possible and bundle rates to save money. We also provide vehicle insurance for ATVs, motorcycles, snowmobiles, boats, trailers, and RVs.
Speak with one of our experts by calling, emailing us, or visiting one of our branches across Canada.
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