Does commuting increase car insurance?

More and more Canadians are commuting to work than ever before. Statistics Canada reported in May 2024 that 16.5 million people in Canada commuted to work. Of these commuters, 9.2% had a long commute of 60 minutes or more, up from 8.7% in May 2023 and 8.1% in May 2022.

So, what does this mean for your insurance? Many factors influence the cost of car insurance, such as the type of vehicle you drive, your age, gender, and even where you live. If you're also wondering whether your daily commute is one of them, the answer is yes. Insurance companies take into account the amount of time you spend on the road and the distance you drive each day when determining your insurance rates.

In this article, we will explore how the frequency with which you drive can impact your auto insurance rates and how BrokerLink can help qualifying customers find low-mileage car insurance.

How insurance companies calculate premiums

Ever wonder how insurance companies come up with the number you see on your auto policy? It’s not random; there’s actually a lot that goes into calculating your premium. Insurers use a combination of personal information and data-driven insights to determine the level of risk associated with insuring you. The higher the risk, the higher the premium tends to be. In addition to your daily commute, other factors include:

Mileage

One of the biggest factors is how much you drive. If you’re commuting daily or racking up a lot of kilometres each week, you’re spending more time on the road. So naturally, there’s a greater chance that something could go wrong.

Driving record

Your driving record also plays a major role. A clean history can lead to savings, while tickets or at-fault accidents usually bump your rates up.

Your vehicle itself

Then, there’s your vehicle itself. Sporty or high-end models typically cost more to insure because repairs are more expensive, and they can be more attractive to thieves.

Where you live

Your postal code matters, too. Living in a busy urban area with more traffic and higher accident rates can increase your premiums compared to living in a quieter, rural area, especially if you are going to be commuting during the busiest times of the day.

Behind the scenes, insurance companies rely on actuarial data (basically, years of statistics and trends) to predict the likelihood of claims. They look at things like accident frequency, repair costs, and even weather patterns. It’s all about assessing risk as accurately as possible. Here's what you need to consider:

Commuting and car insurance

The reality is that the distance you drive for your daily commute can impact your car insurance premium in Canada. This is because insurance companies will take into account the amount of time you spend on the road, as well as the distance you drive each day, and your daily commute is part of this. Since one of the most common reasons drivers spend time on the road is to commute to work or school, one’s daily commute matters.

Longer commutes

If your daily commute is long, your insurance premium might be higher simply because you spend more time behind the wheel, and thus your chances of getting into an accident are higher. Given how a car accident affects car insurance rates, it’s no surprise that a long daily commute could influence your premium in this way.

Shorter commutes

On the other hand, if you have a short daily commute or you choose to get to work using other modes of transit, such as public transportation or cycling, you will likely benefit from cheaper insurance rates.

When renewing your insurance or purchasing a new policy, make sure that you accurately describe the details of your daily commute to your insurance company. Lying about the length of your commute is an example of insurance fraud and could lead to a claim being rejected or your insurance provider cancelling your auto insurance policy down the road. To find out how your daily commute affects your insurance premiums, contact BrokerLink.

Pleasure use and daily commute drivers

Insurance companies in Canada divide your driving habits into two main categories:

• Pleasure use

• Commute use

The category that you fall into as a driver can influence your car insurance rates. In most cases, drivers fall into both categories, and therefore, how much time they spend driving for pleasure versus their daily commute will be considered. We will discuss both categories below:

Pleasure use

Pleasure use is any type of driving done for personal reasons. This may consist of driving to the grocery store or a friend’s home. Pleasure use driving is typically considered to be less risky from the perspective of an insurance company because it may be done at less busy times in lower traffic areas. It can also be done leisurely rather than in a rush to get to your destination while attempting to avoid rush hour traffic.

Commute use

Meanwhile, commuting is something done on a repetitive basis that you know will be done consistently; it could even be your weekly meeting that you attend every week. In other words, your daily commute from your home to your office or your home to your university campus would constitute commute driving. Insurance companies consider commuting to be riskier as it often involves driving:

• At higher speeds

• At busier times

• In high-traffic areas

• For longer distances

Generally speaking, the more time you spend commuting, especially if you have a long commute, the higher your insurance rates may be. On the other hand, if you mainly drive your car for pleasure, your rates are likely to be lower.

When to notify your car insurance company of a change in commute

Whether your commuting habits increase because you started a new job and the office is located farther away from your home, or they decrease because you start working from home part-time or taking public transit to work, it's important to notify your insurance company right away. In fact, failure to do so could lead to a breach in your policy.

For example, if you get into a collision on your way to work and you file an insurance claim, but your insurance company sees that you said before that you have no commute, they may choose to deny your claim, as lying to your insurance company is a form of insurance fraud.

Alternative transportation and savings

As we've mentioned, spending less time on the road can lead to insurance savings. One way to do this is by taking alternative modes of transportation. For example, according to Statistics Canada, in May 2024, 11.4% of commuters said they mainly took public transit, which increased by 1.3% from May 2023. Options for alternative modes of transportation include:

• Walking

• Cycling

• E-bikes

• Public transit

• Car pooling

By choosing to take another mode of transportation for your commute and only driving your car occasionally, you'll spend less time behind the wheel. This means your chances of being in an accident are significantly lower, which in turn helps you qualify for lower insurance premiums.

You may even qualify for a low-mileage car insurance policy with your lower annual mileage. These plans are usually heavily discounted since they take into account the fact that your odds of getting into an accident and needing to file a claim are much lower. Learn more about how to calculate mileage to see if you qualify for an occasional driver discount by contacting BrokerLink.

How to reduce your auto insurance costs if you commute

Commuting doesn’t have to mean high insurance premiums. If you’re on the road regularly, there are still ways to keep your costs in check, especially if you’re a safe and mindful driver. The BrokerLink team has put together the following list of tips that can help Canadian commuters keep auto insurance costs down, no matter the length of their daily commute:

Consider alternative modes of transportation

If you want to qualify for an occasional driver discount or simply reduce how much you drive to save money on car insurance, consider alternative modes of transportation. Popular alternatives include carpooling, public transit, walking, or cycling.

Sign up for usage-based insurance

Usage-based insurance programs are a great option for commuters who drive safely and consistently. These programs use a mobile app or plug-in device to monitor your driving habits, things like speed, braking, acceleration, and the time of day you drive. If the data shows you’re a responsible driver, you could earn discounts on your premium.

Take a defensive driving course

A certified defensive-driving course teaches you how to avoid accidents, handle unexpected situations, and become a more alert driver overall. Not only do you gain valuable skills for staying safe on the road, but many insurers offer discounts for drivers who’ve completed one of these programs.

Raise your deductible

One surefire way to cut car insurance costs is to increase your policy deductible. By taking on this extra financial responsibility, your insurance company will instantly reduce your premium.

Install winter tires on your vehicle

Many insurance providers in Canada offer a winter tire discount to drivers who switch their summer or all-season tires to snow tires during the winter months. Swapping tires can reduce the likelihood of getting into an accident.

Sign up for a driver’s education course

If you're a new or young driver, enrolling in a driver’s education course can make you eligible for a car insurance discount in Canada. Insurance companies recognize that learning from a professional makes you a safer and more responsible driver, which, in turn, leads to lower rates.

Add an anti-theft device to your vehicle

Another tip for saving money on car insurance in Canada is to install an anti-theft or other type of security system in your vehicle. These devices can significantly reduce the odds of your vehicle being stolen, which, in turn, can make you eligible for an auto insurance discount.

Ask about discounts

There are all kinds of car insurance discounts out there. When you contact an insurance agent or broker, be sure to ask them about what types of insurance discounts you could qualify for.

Don’t buy more car insurance coverage than you need

When purchasing car insurance, make sure that you choose your coverage wisely. It can be tempting to purchase every type of coverage under the sun for the most protection, like accident forgiveness or roadside assistance, but this will cost you.

Although some vehicles might warrant extra coverage or higher coverage limits, especially new or expensive vehicles, others won’t. For example, drivers of older or less expensive cars may find that comprehensive and collision coverage are not necessary. That said, it’s important to note that if you lease or finance your vehicle, you might be contractually required to purchase both.

Contact BrokerLink today

If you want more information on how factors like your daily commute can impact how much you pay for car insurance, get in touch with BrokerLink. A licensed BrokerLink insurance advisor can answer any questions you have, including how using your car to commute can impact your rates. We can also provide free car insurance quotes to give you an idea of how much your policy will cost.

As auto insurance experts, your BrokerLink insurance broker can even help you find a new policy, renew an existing one, file a claim with your insurer, update your car insurance address, explain how no-fault insurance works, explain how much car insurance costs in Ontario, or help add a new driver to your policy. We are here for all your car insurance needs.

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FAQs on daily commute and car insurance

If I have a shorter daily commute, will I qualify for a discount on car insurance?

Some insurance companies in Canada offer car insurance discounts to drivers who have shorter daily commutes or who commute less frequently due to other factors like working from home or using other modes of transportation to get to work.

Will an insurance company deny me coverage if my daily commute is too long?

Generally speaking, longer commutes typically translate to more expensive car insurance rates but they shouldn’t preclude you from purchasing coverage. That said, this varies between insurance providers, so it is possible that you could be denied coverage if you have an abnormally long daily commute or you spend significantly more time on the road than the average driver.

If I change my daily commute route, can I qualify for a cheaper car insurance rate?

Changing your daily commute route may impact your car insurance rates, especially if you can shorten it. However, it is not guaranteed. We recommend speaking with your insurance provider before changing your route and make sure that you are always honest with your insurer about your driving habits.

How can I save on auto insurance if I have a long daily commute?

There are several ways that you can save on auto insurance, even if you have a long daily commute. For example, you can bundle insurance policies together, sign up for a driver’s education course, drive safely to maintain a clean driving record, install a telematics device in your vehicle, purchase a safe, reliable car, purchase a hybrid or electric car instead of a gas-powered one, minimize how much time you spend on the road by adopting other forms of transit, and shop around to ensure you always have the best rates.

Does the type of vehicle I drive impact my auto insurance rates for a daily commute?

Yes, the type of car you drive is another factor that impacts your car insurance premium in Canada. An insurance company will want to know the make, model, and year of your vehicle to assess how risky it is. For example, some cars may be more prone to theft while others may have high safety ratings, reducing the odds of severe damage in an accident. Generally, cars that are newer and more expensive have higher premiums than those that are older and cheaper, namely because the former would cost the insurance company more money to repair or replace than the latter in the event of damage. However, some newer vehicles are better equipped to prevent accidents with features such as autonomous braking or crash alerts which can lead to cheaper premiums.

Can I change my car insurance coverage options for my daily commute?

Yes, policyholders can adjust their car insurance coverage as needed. Typically, the best time to do this is before your policy is up for renewal. If you decide that your current coverage is no longer working, you can work with an insurance professional to change it as needed. This may include raising or lowering your coverage limits, increasing your decreasing your policy deductible, purchasing new additional coverage, or reducing the amount of overall coverage on your policy, so long as it still complies with local laws in your province.

What happens if I get into an accident on my daily commute?

If you get into an accident on your daily commute, you should ensure that everyone is safe and call emergency services if required. Please note that depending on where you live, you may be required to call the authorities and report the accident. For example, there are certain circumstances under which you have to report a car accident in Ontario. Next, make sure to exchange contact and insurance information with those involved in the accident. Finally, contact your insurance company. Calling your insurance company after a minor car accident or a major car accident is crucial.

Are there any car insurance discounts for daily commuters?

If you have a shorter commute or use other modes of travel for commuting, like public transportation, you could be eligible for a car insurance discount. Depending on how infrequently you drive, you might even qualify for an occasional driver discount, which can lead to a major reduction in your rates. Beyond occasional driver discounts, you could qualify for other types of car insurance discounts through your employer or past educational institution. There are all types of employment and alumni car insurance discounts out there. Do some research to determine which insurance providers offer discounts to people who work with your company, or attended school where you attended school. You might be surprised to learn how much money you can save simply because of your past choices.

If you have any questions, contact one of our local branches.