You pay your car insurance bill every month, but do you know how your rate is calculated? Considering the fact that car insurance is one of the major expenses that comes with car ownership, you owe it to yourself to learn a little about how insurers determine your premium. Read on to learn about some of the factors that are affecting your car insurance rate – and some of the surprising things that aren’t.
Your driving record. It doesn’t matter how long you’ve been driving if you’ve been on the receiving end of multiple traffic tickets: a few speeding tickets can more than double your premium. And major offences – like drinking and driving or committing insurance fraud – can do more than just increase your rates; they can also make it hard for you to secure any coverage at all.
Parking tickets. Unlike traffic tickets, parking tickets do not increase your insurance rates. Just keep in mind, though, unpaid tickets can come back to haunt you when it’s time to renew your license plate!
Your age. Young drivers typically see higher insurance rates, and for good reason. Teens are more likely to be in an accident, more likely to drink and drive, and more likely to engage in risky behaviour in general.
The colour of your car. This enduring myth is just that – a myth. The colour of your car doesn’t impact your premium, so go ahead and buy that red car you’ve been eyeing.
The make and model of your car. When calculating your premium, your insurer will take into account the make and model of your car. For example, cars with a higher safety rating will be cheaper to insure, and cars that are stolen more often will be more expensive to insure.
Installing a dash cam. Installing a dash cam won’t lower your insurance premium, but it could help you out in the claims process. For example, if you’re in a collision with another driver and it comes down to your word against theirs, a dash cam can provide unbiased evidence that supports your version of events. Just remember, if you were at fault, your dash cam video will unfortunately work against you.
Where you live. It might not seem fair, but where you live can greatly affect how much you pay for car insurance. For example, Ontario drivers see some of the highest insurance rates in the country, whereas drivers in Quebec and Nova Scotia benefit from some of the lowest rates.
Your insurer. Different insurance companies will offer different rates – even for the same driver. Each company calculates risk differently – taking into account different factors or weighing some criteria higher than others. This means it’s in your best interest to solicit multiple quotes before settling on a provider. Shopping around is easier than ever, since you can now compare multiple car insurance quotes online. And don’t forget – it’s important to review quotes at least once a year before you renew, since insurers regularly change their rates.
Obviously, there are some things you can’t change – like the insurance rates in your province or your age. Instead, consider what factors you have control over, such as maintaining a clean driving record and comparing multiple quotes, and use them to your advantage when it’s time to renew your coverage.