Guide on How to Lower Your Car Insurance Premiums

Driving is a necessary aspect of life for several Canadians; however, just because it’s essential doesn’t mean that it’s not expensive.

There are several expenses that Canadian drivers are responsible for, some of which include:

• Gas
• Upkeep and general maintenance
• Major repairs
• Modifications (i.e. winter tires in Quebec)

Additionally, you can’t forget about your insurance premiums. Thankfully, unlike the expenses listed above, Canadian drivers have the ability to influence their insurance premiums (in both good and bad ways).

START A QUOTE

So Canada, do you want to learn how to lower your car insurance premiums? Then be sure to continue reading.

What are car insurance premiums?

Before you can learn how to reduce your car insurance premiums, you need to understand what a premium is.

The term “insurance premium” is often used interchangeably with the term “insurance rate”. However, this is a common mistake, as there is a difference between the two.

• Auto insurance rate - the annual cost of one insurance unit.
• Auto insurance premium - the rate multiplied by the number of units (the total cost of your car insurance).

While on the topic, it’s worth mentioning the difference between an insurance premium and an insurance quote.

An insurance quote is the estimated cost of your insurance premium. Supplying a quote gives insurance companies the ability to promptly provide Canadian drivers with a general idea of the price. The final price of the premium is determined after a thorough evaluation.

How are car insurance premiums determined in Canada?

What an excellent question — there are several factors that insurance companies use to determine the cost of a premium. Some of these variables include:

Personal factors

Personal factors like your age, gender and the area that you live in can influence your insurance premiums for better or worse.

Driving history

Your driving history plays a significant role in the overall price of your premium. Drivers with unmarred records tend to have lower insurance premiums than drivers with multiple offences.

Make of your vehicle

The type of vehicle that you drive has a significant impact on your premium. For instance, the average cost of insurance on a luxury car is approximately $1,500 in Canada. This is noticeably higher than the national average of $1,320.

Other luxury vehicles also tend to be more expensive to insure. With this in mind, you may want to think twice before purchasing that brand-new high-end vehicle.

Size of your deductible

The size of your deductible has a large impact on the price of your premium. Generally, having a small deductible means that you’ll have to pay more for insurance. On the other hand, you tend to pay less for your insurance if you have a large deductible.

Lowering the cost of your insurance in Canada

Now that you’re familiar with the ins and outs of insurance premiums in Canada, you can learn how to save some money.

Temporarily suspend the insurance on one of your vehicles

It’s not uncommon for Canadian families to own two or more vehicles. Because of this, many Canadian families have to pay a hefty sum for their auto insurance.

If you’d like to save  money on your car insurance, you can temporarily suspend the insurance on one (or more) of your vehicles. Doing this will help you save some money in the short term and is excellent for drivers that have recently transitioned into remote work.

However, suspending your insurance, even temporarily, is quite risky and isn’t something that we highly recommend. If your vehicle happens to get damaged your insurance is suspended (even voluntarily), you won’t be eligible for coverage.

Additionally, you’re not allowed to use your vehicle while the insurance is suspended. Although driving without insurance isn’t a criminal offence, it does result in fines.

Furthermore, your current insurance provider may cancel your coverage, forcing you to find a new company. This is often difficult, as insurance providers see drivers with gaps on their records as a risk that’s not generally worth taking.

Reduce your auto coverage

If you’re not keen on suspending your coverage, then you may want to think about reducing it instead.

Canadian drivers can trade in the bells and whistles for basic coverage (generally referred to as mandatory car insurance). Doing this allows you to use your vehicle and save some money simultaneously.

Ask about safety feature discounts

Are you currently looking for a new vehicle? We suggest that you try to find one that has built-in safety features.

Most modern cars come equipped with a handful of safety features, like rear-view cameras. Drivers can also opt for additional features like:

• Lane mitigation tools
• Blind-spot detection
• Park assist

Not only are these safety features invaluable for new drivers, but they can also help you save on your car insurance.

Many auto insurance providers offer discounts to drivers that have access to these features. If you recently bought a car that has one or more of the features listed above, be sure to reach out to your auto insurance agent. Your auto insurance agent can list all of the safety feature discounts that they currently offer.

Consider switching to another auto insurance provider

Do you feel like your current auto insurance plan is too costly? Then it may be time to start looking for a new provider.

Most Canadian towns and cities have multiple insurance companies to choose from. Insurance companies have to compete with each other in order to attract customers, so we offer different types of coverage at various prices.

Taking the time to find a new auto insurance provider can help you save hundreds of dollars on coverage, giving you more financial freedom and flexibility.

If you’re planning on switching insurance providers in the near future, remember not to cancel your current plan until you’ve committed to a new policy. As mentioned above, driving without insurance has severe consequences, so it’s never worth the risk.

Are you still paying too much for car insurance?

If you feel like your car insurance premiums are too expensive, you should use the tips listed above. Although not all of the suggestions may be for you, we guarantee that you’ll find something that can help you save money.