Car insurance can get pretty confusing at times, especially since many critical details aren't necessarily obvious. So, here are our 20 tips to help navigate your way through the fine print a bit easier
Where you drive
The "cut-rate" cons
"No-fault" auto insurance
What's your driver profile?
How often you drive
Raising your deductible
The "red car" myth
"Quote and run" scams
Failure to stop
What kind of car you drive
Recurring cases of speeding
Keeping the car stock
Buying a used car instead of new
Saving on car insurance with driving school
Teenagers and insurance converage
Seat belt negligence can cost you big in insurance
Drinking and driving
Importance of a clean driving record
- Where you drive
- The "cut-rate" cons
- "No-fault" auto...
- What's your...
- How often you drive
- Raising your...
- The "red car" myth
- "Quote and run"...
- Failure to stop
- What kind of car...
- Recurring cases...
- Keeping the car...
- Buying a used car...
- Saving on car...
- Teenagers and...
- Compare quotes
- Seat belt...
- Drinking and...
- Driving abroad
- Importance of a...
Believe it or not, the location of which you drive to and from, can have a significant influence on how your car insurance rate shapes up. This is due to a predetermined list of risk factors (it can vary between car insurance companies) – which includes the frequency of accidents in the area or region, or, that a specific location is deemed unsafe due to intermittent criminal activity.
Looking around for the best insurance rate? Keep an eye out for any shady deals. In many reported scams, these individuals will contact victims via online or by phone, and will impersonate licensed auto insurance agents or auto insurance brokers that offer low rates, often much lower than what the victim is paying or quoted at. After a “service fee” scammers then siphon all their victims’ critical information, such as driving history, personal details, as well as financial information. Afterwards, they’ll collect quotes and info from legitimate auto insurance companies by providing their victims’ falsified info in order to get a “cut-rate”. In reported cases, scam artists typically exclude information about a person’s vehicle accidents or lie about a person’s age, and then will collect a finder’s fee from the legitimate insurance company. The victim, still unaware of the scam, continues to pay his or her premium directly to the insurance company up until they get into an accident and realize their insurance was obtained under false information and that it is not actually valid at all. Now, there are several ways to protect yourself. For one, never pay anyone to look for auto insurance quotes, since legitimate, licensed insurance brokers receive their money from the insurance company – you can look for quotes yourself at sites such as Kanetix.ca. If you do decide to go through a broker, be sure to check out your policy before agreeing to pay a premium – a legitimate broker will allow you to see all terms and restrictions on the policy and take the time to explain them to you if something is still uncertain.
The name DOES NOT mean no one is held responsible, or at fault, in a collision. If you hit the bumper of a car in front of you, having no-fault insurance most emphatically does not mean you can breathe a sigh of relief. If you caused the collision, or were even partly responsible, you can and will still be held responsible, both by your insurer and the law.
It DOES mean that if the collision wasn’t your fault that, you personally don’t have to pursue the other driver and his or her insurer for compensation. But there’s no such thing as a collision where no one is at fault. Whenever two vehicles collide, insurers always assign fault.
Upon applying for auto insurance, there are several bits of information you automatically provide, such as age, gender, martial status, and time of which you were licensed (as in years of overall driving experience) – all of which will influence your insurance rate significantly. For example, you’re a male under 25 and not married, this profile (by default) puts you at what is considered a riskier, more accident-prone group of drivers – so be check the insurance paperwork and speak with the auto insurance company beforehand to avoid any surprises. And naturally, any infractions and outstanding fines on your driver’s record play a major role in this as well.
The distance in which you drive weekly, monthly and yearly plays a key difference in how much you’ll be paying on your car insurance. Think of it this way: the more you and your car are on the road in a single time period, the risk is naturally higher than the other drivers who may only drive occasionally. This can also go both ways, as insurance companies take into consideration not only what kind of distances you drive, but how long you drove a car for – for example, if you drove a car consistently for a year and then biked to work for the next 10 years, your lack of driving experience still is a concern. When consulting with your insurance broker, be sure to explain what your initial driving intentions are.
Raising your deductible can lower the cost of your premium. Keep in mind, however, that if you raise it too much you could be on the hook for more than your budget can handle. If you raise your deductible, consider keeping the amount of your deductible in a savings account set up for precisely this kind of expense. Do NOT be tempted to lower your liability, however. Along with accident benefits, liability is the largest portion of your premium – as much as 65 to 75 percent. But this is the worst place to try to save money. Lowing liability from $1 million to $500,000 can save as little as $50 a year, which is not worth the risk of being responsible for hundreds of thousands if you should be found at fault in a crash.
It’s the one question auto insurance companies get asked frequently, following with the same answer: “No. It doesn’t make any difference on your car insurance if the car is the colour red.” The idea behind the red-car myth is that if a car is red (which, generally is a colour that stands out) it is then naturally associated with ostentatious sport cars, which, under much speculation, lies the fear that it will provoke criminal activity around the vehicle, such as vandalism or theft. Car insurance companies believe this is all a misconception, so if they don’t worry about it, neither should you.
Similar methodology as other auto insurance cons, these scammers will offer below-average auto insurance rates, either through online/newspaper ads (or even a legitimate-looking website) promising several months of free auto insurance coverage. After the victim agrees to buy the insurance, he or she is asked to send either a partial or full payment, often via wire transfer or money wiring service (in a few reported cases, the con artist will want to meet with the victim and be paid in cash.) After handing over the money, the victim is told that their proof of insurance is in the mail. Unsurprisingly, the proof of insurance never arrives, and the scammer simply pockets the payment and moves on to the next victim. Fortunately, there are ways to protect yourself from this kind of scam: a) Make sure you check out the credentials and license number of any auto insurance broker – b) Always ask for documentation of an insurance quote, and check out the standing of the insurance company with local fraud protection agencies – and c) Pay for a new insurance policy with either a check or a credit card, both of which give you some limited fraud protection.
Petty convictions such as running a red light or failing to stop at a stop sign can quickly add up on your driver’s record, which in turn, directly impact your car insurance rate and worse, risks losing your driving privileges altogether. Which is why it’s ever more important to resist the temptation to run the light, even if a police cruiser isn’t around – remember that cameras at random intersections can still record the act.
Depending on the province, you’ll earn two to three demerit points, which remain on your record for two years. You’ll also receive a conviction, which stays on your record for three years. In addition, gliding (instead of coming to a full stop) at a stop sign will get you two to three demerit points. Keep your safe driving behavior up, and your car insurance rate can be more forgiving.
Generally-speaking, more expensive, high-end luxury sport cars cost more to insure, simply due to their premium price and cost to repair or replace, though there are some exceptions. In other cases, some cars (whether they are worth $80,000 or $20,000) are more likely to be stolen than others, due to rarity, or demand, or both. Other cars may keep occupants healthier in case of an accident or be particularly cheap to repair while perhaps causing less damage to opposing vehicles. Either way, once an insurance provider has your information, calculating rates for different vehicles is easy and could make your car-buying decision a lot simpler.
Like failing to stop at a stop sign and getting caught, an initial traffic violation or speeding ticket may not negatively impact your future insurance premiums. That said, if this kind of driving behavior keeps constant in your records, insurance rates will undoubtedly spike up as well. Neither pleasant is the fact that, with infractions, payment is required twice: first at City Hall and again when next year’s rates kick in.
Majority of car insurance companies don’t accept the idea of their insured customers fiddling with their cars – that is, with the exception of more specific insurance companies tailored for more specific vehicles, such as track-performance vehicles. Reason for this is cost: both to the environment (as some modifications disrupt a car’s emissions output) and of course to the car itself, since, if something happens, the insurance company would then be stuck with a car that isn’t road legal or even driveable anymore. Best course of action is to keep the car in its factory-stock form, or contact a specialized auto insurance provider otherwise.
If you buy a new car, the financial institution that loaned you the moolah to buy it will require you to carry both collision and comprehensive coverage. How else can they get their money back if you crash and total the car? But that’s not the end of insurance expenses specific to new vehicles. Also, a new car loses value the minute you drive it off the dealer’s lot, so if you crash into a bus three blocks from the dealer, you already owe the difference. You need gap insurance if you don’t want to have to pay your financial institution the difference out of pocket, however it isn’t necessary on a used car. In addition, by driving a car that’s at least five years old and paid for, you can save between 25 and 30 percent a year on your premium by dropping collision and comprehensive insurance.
Some parents might think that encouraging their teenagers to delay getting their G2 could lower the rates, as they’ll be older when they start driving, however this is purely myth, since the bottom line is, the sooner they get their G2, the sooner they can get better insurance rates. Which is why having a driving school background beforehand is taken into consideration by car insurance companies and can result in a much lower rate than without it.(Note that driver training has to be taken through schools accredited by the Ministry of Transportation in order for insurance companies to reduce the insurance rate.)
Is your son or daughter planning to pay the insurance coverage on their own cars? Well costs for the average 17-year-old teen hovers around $13,000 – without prior driver training – and $10,000 with. Steep, yes, then again, so are the risks involved. So, compare these rates to simply adding a teen to an existing family car, where insurance costs for a 17 year old drivers averages out at $2,749.75 without driver training and $2,023.75 with driver training. Next time you hear “but mooom…” or “daaad…” achingly echoing in your ears, you can at least know what to expect in terms of insurance cost. Keep in mind also that insurance companies still take into consideration whether the teen is a guy or girl, as coverage for males is generally a lot higher.
When you request quotes from several insurers and compare them side by side with websites such as Kanetix.ca, you can quickly identify whether the rates you’re currently paying are too high. It’s also important to know exactly what you wish to cover – come insurance companies may even go as far as covering curb tire damage and scrapes on your bumper, though you may not feel that’s necessary. Rule of thumb is, the wider the coverage, the higher the costs.
Every province and territory in Canada mandates that drivers and their passengers wear seat belts, as a proven way to save lives and prevent serious injuries that might otherwise occur in a collision. For this reason, drivers who fail to wear their seat belts can expect to receive two demerit points for the infraction.
This is considered a minor offence. However, it is important to realize that drivers can be held responsible for any passenger under the age of 16 who fails to wear a seat belt. Suppose you are traveling with 3 teens, all of whom have neglected to buckle up. If caught, you can potentially receive two points for each of them.
Auto insurance companies REALLY don’t like it when you choose to mix drinking and driving into the cocktail – and, of course, the obvious and terrible safety risk to yourself and others. Apart from not only the possibility of getting your licence suspended and car towed away, your insurance company can choose to revoke your coverage, either upon the first or second D&D offence. If the conviction is fairly light, keep in mind that your driving record still suffers, along with the insurance rates you’ll receive from then on.
Planning on taking your car past Canada, U.S or even North America? it would be beneficial to have some sort of travel-based auto insurance. Be sure to check with your car insurance company to see what kind of packages they offer, if they do.
Without question, your driving history is directly related to the cost of your insurance policy. From your insurance company’s perspective, a clean driving record doesn’t necessarily means you’re a safe driver, but what it does specifically mean that it makes you less of a “risk” than drivers with poor records. With insurance companies, less risk means the less you’ll pay for your auto policy, so do your best to maintain a clean driving record.