When you’re buying auto insurance, everyone knows that you pay more if you drive a red sports car — right?
Overall, that’s a myth, but most insurance companies do look at the type of car you drive and how likely it is to present a risk to insurers.
And the good news (if there can be any, when it’s time to shell out for insurance premiums) is that there is a vehicle list, and you can easily access it and check it out for yourself.
Auto insurance varies widely across Canada. Drivers in British Columbia, Saskatchewan and Manitoba purchase their coverage from the government. In other provinces and territories, drivers buy theirs from private insurance companies, with each province setting out mandatory coverage that all drivers must have.
These can be supplemented by optional policies, such as extra liability coverage, collision repair if you’re at fault, or if the car is stolen or destroyed by fire. While these “extras” might not be required under your province’s laws, you may be compelled to buy them by your bank or other lender if you’re financing or leasing your vehicle, in order to protect that company’s financial stake in it.
Many insurers (including the government ones) subscribe to CLEAR, the Canadian Loss Experience Automobile Rating. This list uses data from actual insurance collision and comprehensive claims, along with information on the frequency and cost of theft claims, to help determine the cost of insuring each particular vehicle.
Simply put, CLEAR determines how likely it is that a specific vehicle will require an insurance claim, and if so, how much it’s going to cost.
The most recent version of the list covers model years 2003 to 2015 on vehicles where at least 1,500 of each were insured between 2011 and 2015. It can be downloaded from the Insurance Bureau of Canada.
Before CLEAR, insurance companies had to go on the car’s selling price and basic information about damage and repair costs when they determined premiums, according to IBC. This meant that in most cases, the more a car cost to buy, the more it cost to insure.
However, that didn’t take many other factors into account, such as the cost of repair (most vehicles in collisions are fixed rather than written off), safety features that could reduce costs associated with injury, the rate of vehicle depreciation, and the likelihood of theft, including any theft deterrent systems on the vehicle.
By looking at real-world insurance costs, the CLEAR system could more accurately determine how much each vehicle could potentially cost the insurance company, including its costs as it aged and its value dropped due to depreciation. The statistics for theft have also changed over the years as more automakers build theft deterrent systems into their vehicles, including the immobilizers that were a federal mandate as of September 1, 2007.
Of course, there’s a lot more to your insurance premiums than just the type of vehicle you drive. The cost of your insurance can be affected by where you live, your age, your driving record, how far you drive, any claims you’ve made in the past, who else in your household drives the car, and possibly even by factors such as if you switch to winter tires, or if you were taught by a government-accredited driving school.
If you’re in a province with private insurance, shop around for the best rates, and ask if you get a discount by switching your house, life, or other insurance policies to a single insurer. And be careful out there. A bad driving record is the fastest way to soaring auto insurance premiums.