You might already know that car insurance premiums are determined based on your risk factors. Did you know there are tactics you can take to help control the cost of your car insurance? First let’s talk about the risks car insurance companies look at when determining how much your premium will be. Keep in mind that your premium is determined between the following risk factors and your own individual history.
Risk Factors that are taken into account when insuring your car
- The type of car you drive. Insurers will take into consideration the make, model, year, and value when determining what risk factors are associated with it. The potential repair costs are also looked at. Cars with a higher safety rating may hold up better in a collision than others with a lower safety rating. This of course means that injury to occupants and damage to the car itself may be less severe and cost the insurer less. The more valuable the car, the more it costs to replace making a car like this more expensive to insure. Your insurance company may consider the CLEAR system to rate your car. Interestingly enough, the colour of your car is not taken into account.
- How you use your car. The more you drive your car, the higher your chance is of getting into an accident. Your insurance company will want to know if you drive a lot, you drive long distances or you drive to work everyday.
- Your driving record. A long accident-free driving history can help keep your premiums down, while every at-fault accident you are in will push your premiums up. Moving violations such as speeding tickets may also increase your premiums.
- Your driver profile. Depending on your province, the claims history of drivers the same age, with the same driving experience may be factored into your rate. Your premium may be impacted by how often your “group” makes claims.
- The listed drivers of your vehicle.
- The neighbourhood in which you live. Premiums vary from neighbourhood to neighbourhood, and from city to countryside. Urban dwellers generally pay more for insurance than those who live in rural areas. Since cities have more people, they also have more collisions, which increases the cost for insurance as the chance of a claim is higher. The overall crime rate in your neighbourhood also plays a part. If you live in an area with a high crime rate then the risk of your car being vandalized or even stolen is much higher.
What You Can Do to Control the Cost of Auto Insurance
1) Dropping collision coverage on an older car
2) Getting package deals for insuring your car and home, or more than one car, with the same insurance company
3) Installing an approved theft deterrent system in your vehicle
4) Buying a car with a lower-cost insurance rating
5) Look into discounts. (These vary from company to company, but some offer discounts for graduating from an approved driver training course, for mature drivers, even for long-term customers who are claims free and more.)
Find out more and Have Car Insurance explained by IBC!
Disclosure: The opinions and language are all my own, and in no way do they reflect The Insurance Bureau of Canada.
Elizabeth Lampman is a coffee-fuelled Mom of 2 girls and lives in Hamilton, Ontario. She enjoys travelling, developing easy recipes, crafting, taking on diy projects, travelling and saving money!