Everybody loves to save costs where possible. As car insurance premiums continue to rise in Ontario, many car owners are wondering how they can lower their rates. For those wanting to know what they can do to help cut costs on insurance, here are three things to consider if you’re looking to get a lower insurance rate.
1. Your driving habits
Insurers each use different algorithms in order to determine their insurance rates, taking into account the driver, demographic data and vehicle type. Though each insurer will measure these factors differently, your driving history will always be one of the most important factors in setting your rates.
Therefore, good drivers will often see significantly lower insurance rates. This means obeying traffic laws, maintaining the speed limit and putting the phone away if you want to reduce what you pay for car insurance. Every accident you’re in or ticket you receive will likely impact your insurance rate.
Additionally, good drivers are starting to receive more perks on their insurance rates with the introduction of new technology. Today’s apps are able to monitor real-time data on your driving habits and report this information back to your insurer. Because of this, usage-based auto insurance is on the rise, and drivers with good driving habits can receive as high as a 30 percent discount on their insurance premium.
2. Your car
In general, there are four key traits regarding your vehicle insurers will take into account when setting your rates. This means they are key items to consider when shopping for a new car. These are price, age, safety ratings and model.
In simpler terms, premium rates reflect what it would cost to repair or replace your car. Since more expensive cars cost more to repair or replace, their rates are going to be higher. Higher-end or older cars may also be more susceptible to theft, with the former being more lucrative and the later generally being easier to steal. A vehicle’s safety rating has a significant impact on insurance premiums as the safer a car, or in other words the better the vehicle ranks in crash tests, the less likely the driver and passengers will be injured in an accident. The less chance of an injury the less the insurer may have to pay for medical treatments for the passengers.
As electric vehicles become more accessible, insurers have more to consider when it comes to what fuels your car as well. How does this impact your rate? Again, it comes down to cost. At this point, replacing the parts of electric or hybrid vehicles tend to be more difficult and more expensive. This ultimately results in higher premiums for electric vehicles.
Finally, the make and model are also considered in setting your rate. If an insurer experiences more accidents with a certain brand of car, they are going to raise the rates on those vehicles. The fancier the make of the car, the more expensive it will be. Not only is the base model of a vehicle typically cheaper to purchase, but it’s also often cheaper to insure.
3. Who you work with
Though it’s often thought to be cheaper to cut out any middlemen and work directly with an insurance company to set-up your plan, brokers are able to save drivers money. Because insurance brokers work for you, they will ensure you’re properly protected at the best rate possible. Unlike direct writers (banks that sell insurance) who only have one option to sell, Brokers have then entire market to shop for their clients, making the companies fight for your business!
Additionally, brokers are able to guide you through the claims process if you ever need to file one, working to help make the process as smooth as possible and save you time. They also work to get you the best settlement possible so that your life can return to normal as quickly as possible.
Be sure to keep your broker up-to-date with significant life changes, such as a divorce or employment change. Factors such as these may change the way your insurance views your risk, impacting your pricing.
