Looking for car insurance but aren’t sure where to start? Consider this your unofficial guide on how to shop for car insurance. From gathering the necessary documents to consulting with a broker, we explain the process of shopping for auto insurance below.
1. Gather the necessary documents and information
The first step to shopping for car insurance is gathering the documents and information you will need to provide a broker or prospective insurance company. Organizing these documents before you start will streamline the entire car insurance shopping process, so be sure to come prepared with the following:
Current insurance policy
Assuming this is not your first time purchasing car insurance, you will need to provide the details of your current policy. At a minimum, your broker will require the name of your current insurer, your policy number, and the renewal date of your policy. However, more often than not, they will require a full breakdown of the coverages, limits, and deductibles for the policy. We suggest bringing a copy of your policy with you for ease.
The next piece of documentation you will need to provide when car insurance shopping is your driver’s licence. An insurer will take note of your driver’s licence number and its expiry date. Your licence must be valid to obtain auto insurance. If your licence recently expired or is about to expire, you will need to renew it before you can purchase a new car insurance policy. Furthermore, if someone else in your household drives your vehicle, you must also provide copies of their driver’s licences that clearly show the numbers and expiry dates.
Make, model, year, and vehicle identification number (VIN)
To accurately calculate an insurance premium, your insurer will need to know the type of car you drive. Specifically, they will ask for the make, model, year, and vehicle identification number (VIN). This will help them determine the value of your car, which influences insurance rates. An insurance broker may also ask about the condition of the vehicle, as well as its trim level and any features it has (e.g. is it two-wheel or four-wheel drive and does it have any security devices like anti-theft locks?).
Insurance companies can only provide accurate auto insurance quotes if they know your driving history. Therefore, drivers must be prepared to provide information about any traffic violations or convictions from the past ten years (e.g. traffic tickets, accidents, DUIs, etc.). The information needed varies by the insurer but may include the date and type of violation.
Drivers must also provide their claims history. This is a history of all insurance claims made to your past insurance provider(s). These claims can be for anything from accident-related claims like fender benders to comprehensive claims, such as vandalism, theft, or windshield damage.
Letter of experience
Finally, if you recently moved from another province or country, the insurance company might require a letter of experience. A letter of experience, or claims experience letter, is an up-to-date record of your insurance history that is provided by your past or current insurance provider. It serves as a reference and can provide your new insurance company with a detailed breakdown of your claims history. Please note that if your claims history is minimal, providing a letter of experience (even if it’s not mandatory) can result in lower insurance rates.
It is also worth noting that you may be required to provide several pieces of documentation just to obtain an auto insurance quote. Though getting a car insurance quote is often easy (and free with BrokerLink), the accuracy of your quote depends on the level of detail you provide. Therefore, for the most accurate auto insurance quote possible, we recommend having the above information on hand.
2. Choose the right coverage
The next step to shopping for car insurance is to choose the right coverage. There are plenty of coverages available to drivers in Canada, some of which are mandatory and some of which are optional. You will need to research the minimum coverage requirements in your province to ensure you choose a policy that complies with local laws. From there, it is up to you to decide which coverage limits and optional coverages (if any) you want to include with your policy. We break down a few of the most popular mandatory and optional car insurance coverage types below:
Third party liability coverage
Third party liability coverage protects drivers if they get into an accident that they are at fault for. For example, if you cause a collision that results in bodily injury or property damage, liability coverage can help you cover the costs of medical expenses or vehicle repairs. It can also help pay for any necessary court fees or legal counsel. Many provinces require drivers to carry a certain amount of third party coverage. For example in Ontario and Alberta, drivers must hold a minimum of $200,000 in third party liability coverage at all times.
Direct compensation - property damage coverage
Direct compensation - property damage coverage protects the policyholder in the event that they get into an accident that was not their fault. This type of coverage offers compensation if you suffer an injury or your car is damaged in the accident. In the case of direct compensation, the insurance company may reimburse the policyholder directly for their claim.
Accident benefits coverage
Accident benefits coverage can help cover the costs of medical expenses following a collision. This type of coverage can be claimed no matter which party was at fault for the accident, and it can help pay for the medical expenses of the driver, passenger, or any pedestrians involved in the accident. Examples of medical expenses accident benefits can cover include rehabilitation, prescription medications, and physical therapy.
Uninsured automobile coverage
Uninsured automobile coverage protects you and any passengers in your vehicle if you’re involved in an accident with an at-fault driver who is uninsured or underinsured. This mandatory coverage type may also protect against hit-and-runs.
Collision coverage protects the policyholder if they get into an accident with another vehicle or object on the road, no matter who is at fault for the accident. Under the collision coverage section of your policy, you can receive compensation to help pay for any property damage that resulted from the accident, such as a damaged car in need of repair.
Comprehensive coverage protects drivers against a wide range of unforeseen events on the road. While standard auto insurance coverage in Canada provides a certain degree of protection against collisions, it does not protect motorists from non-collision-related circumstances. That’s where comprehensive coverage comes in. This optional coverage type can safeguard your car against insured perils like theft, vandalism, falling objects, water damage, and fire.
Accident forgiveness coverage
One final type of optional car insurance coverage popular among drivers is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim.
Note: coverage varies by province.
Please note that driving without insurance in Canada is illegal, and getting caught driving uninsured can result in hefty fines, jail time, and the suspension of your driver’s licence. If you are not sure whether your policy meets your province’s minimum requirements, contact BrokerLink.
3. Consult with a car insurance broker
Step number three is to consult with a car insurance broker. Once you’ve gathered the necessary information and know what coverage you’re looking for, working with a broker is your best option for finding the coverage you need at a great price. An insurance broker works independently of the insurance companies. They are licenced, often work at brokerages, and have extensive knowledge of the insurance industry and the current market. The opposite of insurance agents who represent one specific company and specialize in that company’s product offerings, insurance brokers possess knowledge about multiple companies’ offerings. This allows them to shop around on a customer’s behalf to find them the best possible coverage. Insurance brokers take the time to understand the unique needs of each customer. Next, they contact Canada’s top insurers to obtain quotes, compare policies, and unlock discounts to find you the most comprehensive coverage at the lowest rate. Once you’ve found a policy you like, they will guide you through the purchase process. Additionally, in the future, a broker can help modify your policy with your insurer and can even help you file a claim (brokers are known to fight to ensure their customers receive proper compensation in the event of a claim).
How to buy insurance through an insurance broker
Buying car insurance through an insurance broker from BrokerLink couldn’t be easier. Get started by following the three steps below:
Step 1: Contact an insurance broker
The first step to finding the best coverage at the lowest rate is by contacting an insurance broker. You can reach BrokerLink by phone, email, online, or in person at any one of our locations across Canada. At BrokerLink, an expert insurance advisor is on hand to answer your questions, provide you with a free car insurance quote, and get to know your insurance needs.
Step 2: We shop around on your behalf
The second step of buying car insurance through a broker is the easy part. You sit back and relax while a dedicated insurance expert does all the work for you. Your broker will contact Canada’s top insurance companies to obtain and compare quotes on your behalf, all in an effort to find you the best rate.
Step 3: You get a great rate
The last step to purchasing car insurance through a broker is getting a great rate. Your advisor will present you with several policy options and take the time to walk you through each. From there, you get to pick your favourite.
4. Ask about car insurance discounts
Whether you choose to purchase insurance through an insurance broker (as recommended in step three) or directly through a provider, it’s wise to ask about car insurance discounts. Insurance companies in Canada offer a vast range of car insurance discounts to drivers. We outline some of the most common auto insurance discounts below:
Safe driver discount
Many Canadian insurance companies reward drivers with clean driving records through what is known as a “safe driver” or “good driver” discount. To qualify, a driver usually needs to maintain a clean record (one that is free from claims, accidents, or tickets) for a set amount of time (usually three years). Safe driver discounts vary considerably, with some supplying savings up to 25% and others around 5%. Sometimes an insurance provider will offer policyholders an increased discount for every year that they continue to maintain a clean driving record.
Driving school discount
Completing a recognized driving school, course, or program is another way to qualify for an auto insurance discount. These discounts are typically designed for young or new drivers as a way of incentivizing them to enrol in a driver training or education program. Driving school discounts are usually around 5%, which might not sound like much but can be helpful, especially for young drivers who tend to have the highest insurance rates. Plus, driving school offers several other benefits, such as making you a safer, more confident driver and possibly reducing the amount of time you have to wait before your next driving test (in the province of Ontario, drivers who graduate from an approved driving program can take their G2 test eight months after their G1 rather than having to wait a full year).
Snow tire discount
Since January 2016, insurance companies in Ontario have offered car insurance discounts to policyholders that equip their cars with winter tires. The purpose of this is to incentivize drivers to install snow tires on their cars, which are known to perform better and be safer than all-season tires over the winter. Snow tire discounts vary but typically hover around 5%. Beyond simply exchanging your summer or all-season tires for winter tires, there are a few other conditions drivers usually have to meet to qualify for this discount. First, drivers typically need to buy a set of four winter tires and they must notify their insurance provider that they have purchased the tires (policyholders should be prepared to show a copy of the receipt or invoice to prove their claim). Secondly, the winter tires must be installed on your vehicle before the start date specified by your insurance company and left on until the end date specified by the insurance company. These dates vary between insurers but are usually from December until March.
Installing a telematics device in your car might make you eligible for a car insurance discount. Similar to the principle behind the safe driver discount, an insurance provider may reward you if you install a telematics device (a device that tracks one’s driving habits) in your vehicle and it reveals you are a safe and responsible driver. Most often, telematics car insurance discounts work like this: the safer you drive, the higher your discount will be. If your insurance provider doesn’t have telematics devices, they may have a mobile app you can download that functions similarly by tracking your driving habits.
Bundling insurance policies discount
Another common car insurance discount that might be worth considering is the bundling insurance policies discount. Bundling insurance is the process of buying multiple insurance policies from the same provider and doing so can result in major savings. For example, if you purchase car insurance and home insurance from the same insurance company, you could save between 15% and 20% per policy.
Private parking discount
Where you park your vehicle can have a direct impact on your car insurance rates, and by parking it somewhere safe, you could be eligible for a discount. Generally speaking, insurance companies consider parking in a public space, such as on a street, to be riskier as it increases the odds of your car being damaged or stolen. Therefore, some insurance companies may be willing to reward drivers if they take the precaution of parking their vehicle somewhere private (e.g. a private driveway, garage, or laneway). If you park your vehicle in a private parking spot, don’t forget to notify your insurance company as you could receive a discount.
Drivers of a certain age or retired drivers may also qualify for an auto insurance discount. For example, if you are an Ontario driver who is retired, you could save up to 15% on car insurance. This can be a huge help as auto insurance premiums might go up for drivers of a certain age.
Insuring multiple cars discount
Insuring more than one car at the same time is another way to receive a car insurance discount. Similar to how bundling multiple insurance policies together can result in a discount, so too can buying more than one car insurance policy. If your home has more than one car (e.g. a car for you, your spouse, and your adult child), insuring them together would not only be convenient but could save you up to 15% on each policy.
Policy renewal discount
To keep their customers happy and encourage loyalty, some insurance companies offer policy renewal discounts to customers. You might be eligible for such a discount if you have been with a provider for a certain number of years and had no at-fault accidents. If you have been with your insurance company for a long time, consider asking them about a renewal discount the next time your car insurance policy is set to expire.
Electric vehicle discount
Save the environment, save money at the gas pump, and save money on car insurance by purchasing an electric vehicle. Many insurance providers in Canada now offer discounts of around 5% to drivers of electric and hybrid vehicles. So if you’re in the market for a new car, consider an eco-friendly option.
Anti-theft device discount
One final car insurance discount to ask about is the anti-theft device discount. As you can probably tell, insurance companies like to reward safety (hence the private parking, good driver, telematics, and winter tire discounts). The principle behind the anti-theft device discount is the same. When you install an anti-theft device in your car, it becomes that much harder to steal, which could save an insurance provider thousands or even tens of thousands of dollars. As a reward, an insurer may offer a driver with an anti-theft device in their car a discount of between 5% and 15% on their car insurance policy.
It is important to note that not all insurance companies offer the discounts above, and if they do, they might be subject to unique terms and conditions. Plus, the amount of the discount can also vary between providers. Remember to ask each prospective insurance company about the discounts they offer and the terms of each to find out if you qualify.
5. Learn how to save money when shopping around for car insurance
Beyond the discounts mentioned above, there are a few other ways that drivers can save money on car insurance. Understanding what these are is crucial before purchasing an auto insurance policy. To learn more about how you can save money on auto insurance, contact the experts at BrokerLink.
Choose annual over monthly payments
Did you know that paying for car insurance in one annual installment can save you money? Many insurance companies charge an administrative fee every time you make a payment, which is why paying annually usually ends up being cheaper than paying monthly.
Increase your policy deductible
Another way to save money on car insurance is by increasing your policy deductible. Any driver can do it and it almost always results in a lower premium. Raising your car insurance deductible by as little as $500 or $1,000 can be enough to lower your rates. So if you’re looking to save money on auto insurance, raising your deductible could be a worthwhile option. That said, policyholders should think carefully before raising their deductibles, as in the event of a claim, they would be responsible for paying the full amount of the deductible before the insurer would step in. Therefore, a driver should never increase their deductible to an amount they cannot afford to pay. Contact a BrokerLink insurance advisor to learn more about how deductibles work and what deductible is right for you.
Maintain a clean driving record
Maintaining a clean driving record is one of the most effective ways of saving money on car insurance. As mentioned above, insurance companies reward drivers with clean driving records. To achieve a stellar record, you must drive safely and responsibly, obeying the rules of the road and avoiding accidents or traffic violations. Enrolling in a defensive driving course can also contribute to a clean driving record. Ultimately, even if your record isn’t clean enough to qualify for a safe driver discount, the fewer incidents on your record, the lower your insurance premium is likely to be.
Work with an insurance broker
Another tip for saving money on auto insurance is to work with a reputable broker from BrokerLink. BrokerLink is a full-service insurance brokerage with over 30 years of car insurance expertise. We know the ins and outs of the auto insurance industry and have the resources to help you find quality coverage at a great price. We will obtain quotes, compare policies, and unlock discounts on your behalf to ensure you never pay more than you have to for car insurance. Save time and money by consulting with a BrokerLink insurance advisor today.
Compare at least three different policies
Our final piece of advice to help you save on car insurance is to compare at least three different policies. Ultimately, shopping around for car insurance, whether you do it yourself or through an insurance broker, is the only way to ensure you get the best possible rate. Comparison shopping will prevent you from falling into the trap of assuming that one provider is the cheapest without proper research. Since car insurance companies are constantly underwriting behind the scenes, the prices of policies change all the time. For this reason, it’s important to compare your options every time your policy is up for renewal. Never assume that your existing policy still offers the best rate. Instead, obtain quotes and evaluate each option. Do not simply choose the cheapest rate, but assess them according to the following:
- The details of your policy: To receive an accurate quote, provide as much information as possible (e.g. your driver’s licence number, claims history, VIN, vehicle make, model, and year, traffic violations history, and claims history). In addition, be sure to provide each insurance company with the same details so that you can fairly compare each quote. Once a quote has been provided, remember to double check that your personal details, coverage needs, and driving record are all accurately reflected in the quote.
- The coverage and deductibles included with the policy: Chances are, the quote with the cheapest rate may also offer the least amount of coverage and the largest deductible. Depending on your vehicle, driving record, and driving habits, the minimum coverage may not be enough to suit your needs. Make sure to carefully consider the coverage you need and the deductible you are willing to take on.
- Your payment options: Compare quotes according to the payment options. For example, do all providers give you the option of paying monthly, or are you required to pay annually? Are additional fees charged if you pay monthly rather than annually and what are they?
- Eligible discounts: You should always ask about discounts (conditions and amounts) and factor in any discounts you qualify for into the quote. Though one quote might seem like the best value, this may not be the case when you adjust for a safe driver, bundling policies, or winter tire discount.
Comparing multiple car insurance policies not only prevents you from overpaying for car insurance, but also provides drivers with peace of mind.
6. Never lie to your insurance provider
The last step to shopping around for car insurance is to never lie to your provider. When faced with high premiums, some drivers might be tempted to provide false or misleading information to qualify for a lower rate. Providing a different address, leaving a driver off the policy, underestimating your annual mileage, or conveniently leaving out that the vehicle is used for business as well as personal reasons are all examples of ways that policyholders might lie to get better rates. While you might (temporarily) experience lower rates, if your insurance company finds out you lied (which they will if you have to file a claim), there will be serious consequences. For example, the insurer would not cover the claim, leaving you on the hook for the full cost of the damages. In addition, your provider would likely cancel your policy, which would leave you without coverage and make it much harder to find a policy in the future (and if you were able to find a policy, you might only qualify for high-risk auto insurance which is much more expensive). That is why it is always best to be upfront and truthful to your insurance provider from the get-go.
Get in touch with BrokerLink to learn more about auto insurance
Still have questions about car insurance? Contact BrokerLink today, we’re happy to walk you through the process of car insurance shopping, explain what documents you need to provide, and how to compare policies. Of course, we are also around to shop around on your behalf to make car insurance shopping a hassle-free experience. Simply provide us with a few basic details and your coverage preferences, and we will compare quotes to find you the best coverage at the lowest rate. Contact BrokerLink to get started today.
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