When it comes to car insurance, some questions just keep cropping up again and again. We’ve picked out nine of the most frequently asked and answered them for you.
Q: Why should I shop around for insurance? What’s wrong with sticking with who I’ve got?
What if I add security features to my vehicle? Does that help with insurance?
Q: Does it matter where I park my car?
Q: How does a deductible work?
Q: What’s a No Claims Discount? Is it worth keeping?
Q: I’m a young driver: can I list my parent as the primary driver on my car for lower premiums?
Q: What are telematics? How do they get me a discount?
Q: My car’s a bit of a hot rod. Do my vehicle’s modifications my affect insurance premiums?
Q: Can I insure more than one vehicle under one policy?
A: Shopping around could net you lower costs and better coverage. Insurance companies attract new customers with fantastic introductory rates, but over time, those rates will rise. Every few months, you should shop around for better deals, both with your current company and with other providers. Use websites like Comparasave or Insurance Hotline to get a list of quotes from the top car insurance companies in Canada.
A: Definitely. Increased security, such as alarms, locks and tracking devices, statistically lower the likelihood of your vehicle being stolen. This decreases the chance of a claim, which lowers your risk index in the eyes of the insurance company. Lower risk means lower premiums and better coverage all around.
A: Yes. Statistically, most vehicle vandalism and theft occurs on vehicles parked on the street. If you park in a driveway or in a garage, you have a safer parking location, and in turn, your risk is lowered. This lowers your premiums for all of the reasons mentioned above.
A: It’s the amount you pay in the event of a claim. Your deductible is the cost you must pay out-of-pocket for any repairs before insurance kicks in to pay the rest. Usually, the higher the deductible, the lower your premiums: if you voluntarily pay more for your deductible, your rates go down. In the event of an accident, however, if your damage is minor and your deductible is high, your insurance may not pay anything.
A: Yes. No Claims Discounts or NCDs (earned over time by simply not making an insurance claim) can be very significant, taking as much as 70 percent or more off of your monthly premium. If it’s possible for you to insure your NCD – that is, to pay to protect it even if you do get a single claim or two within a 12-month period – then do so. Also, don’t be afraid to shop around for new insurance. Your NCD should transfer over.
A: No. This process, known as fronting, is illegal. By law, the primary listed driver (or principal operator) is the one who drives the vehicle the most. Listing another person as the principal operator when they are not, just in order to lower your premiums, is considered fraud and can carry stiff penalties.
A: Telematics involves insurance that varies according to tracked driving habits. A tracking device is usually added to your vehicle. This device monitors your average speed, acceleration and braking habits. It also monitors how much you drive, what time of day it is when you drive and other such information. This all tallies up to determine how risky you are as a driver. If you drive safely, this proof lowers your premiums. On the flip side, it is not usually used to increase premiums.
A: Yes. Performance-enhancing modifications, such as engine turbochargers, statistically make your vehicle riskier. This will increase premiums. Even cosmetic changes can make your vehicle more attractive to potential thieves, which also increases risk. Also, remember that making modifications without informing your insurance company can invalidate your coverage in the event of a claim.
A: Yes. Most insurance providers today have options for a multi-car policy for a family. This policy is ideal for families with two or more vehicles, as each additional vehicle comes with a slight discount. Overall, it is cheaper to insure several vehicles under one policy than it is to obtain multiple policies.