The steep cost of auto insurance has become a galvanizing topic for Canadians, inciting the fury of Joe and Jane Commuter as well as countless politicians, who have turned it into a crucial election issue.
While you wait on legislators to do their bit, here’s a list of things you can do to trim your insurance rates.
1. Attend driving school If you’re 16 and aspiring to become part of the car nation, take a training course through a well-regarded institution like Young Drivers of Canada. You risk offending your father — who wanted to educate you himself behind the wheel of his rusting Cadillac — but it’s worth it. That certificate of successful completion, modest as it looks, can knock as much as 40 percent off your premiums.
2. Check the vehicle’s claims history When assessing any insurance application, insurers refer to the Canadian Loss Experience Automobile Rating (CLEAR) system, a database that tracks types of claims and their frequency on every vehicle on the market. Models with poor safety features, pricey repairs and high theft rates cost more to insure.
3. Buy an inconspicuous vehicle So-called “prestige” or “high-performance” vehicles like sports cars, luxury sedans and SUVs draw thieves like bees to honey. Insurance companies know this only too well and charge accordingly. A person who drives a flashy BMW Roadster is likely to have 25 percent higher premiums than someone who owns a nice but unassuming Chevrolet Cavalier.
4. Buy used The cost of replacing parts on a new model is substantially higher than on its four-year-old counterpart. Your premiums will reflect this.
5. Resist the temptation to soup up your car Many insurance companies rebuff drivers who trick out their cars with vehicular steroids like a titanium muffler, spoiler and turbo-charged engine. There are companies, however, that do insure muscle cars; but prepare for a long search for someone to accommodate your ride.
Whatever you do, be frank. If you insure your vehicle without telling the agent about all the performance-enhancing extras, you could be doubly stung in an accident. The insurer will not replace the accoutrements, or it might refuse your claim outright on the grounds that you misrepresented your vehicle.
6. Raise the deductible The deductible is the maximum figure a driver will pay for his own repairs in the case of an accident or fender bender. Most Canadian drivers have a deductible of between $500 and $1,000 (the maximum is generally $5,000). Raise the deductible, and you reduce the insurance company’s payout burden. As compensation, they will lower your premiums.
7. Consider changing your postal code Insurance companies keep tabs on the traffic patterns and criminal statistics on every postal code in Canada. If you happen to live in an area beset by crime or a particularly treacherous intersection, it will influence your premiums. If it’s feasible, consider moving to a safer, less congested neighbourhood.
8. Consider going rural Gridlock — coupled with the well-documented impatience of urbanites — leads to a lot of accidents in major cities. Not surprisingly, city drivers pay higher premiums than those who reside in the country, where traffic is lighter and people move at a slower pace — literally and figuratively.
9. Consider moving to another province If you’re tired of seeing your blood pressure rise with insurance premiums, you might consider relocating to a province that has taken a stand on the issue. Both Alberta and Nova Scotia have frozen insurance premiums.
10. Commute another way If you work in a major urban centre but live in a pastoral village, chances are you might take a major expressway to commute. Or, you might not. Highways invite accidents; back roads, not so much. If you take an alternate, less perilous route to work, you could enjoy savings of as much as 15 percent off your premium.
11. Limit your mileage If you’re able to limit your driving activity, you could be slotted into a more advantageous insurance category. A “low mileage” driver logs fewer than 12,000 kilometres a year (this is the maximum figure acknowledged by most insurers) and is rewarded with discounted premiums.
12. Get the best possible security system The more robust your car’s security system, the better the rate. A vehicle kitted out with a GPS (Global Positioning System) will score significantly higher points with insurers than a car that has the Club. That said, the Club still beats Nothing At All.
13. Put your best driver forward Insurance companies love drivers with years of unblemished experience. If you’re trying to decide whom to designate as the family’s principal driver, select the person with the spotless record.
14. Don’t pay your tickets so quickly This may sound like dubious, even amoral advice, but it’s a trick that works: don’t be so quick to pay your tickets. In most jurisdictions, the transportation ministry keeps track of an individual driver’s minor convictions (e.g. speeding tickets) for a short period, usually three years. If you had a speeding conviction two years ago, and you just got another ticket, stall paying it or appearing in court.
If you pay, you’ll have two convictions on your record, and you’ll be bumped up to a higher insurance premium. Wait until the three-year window has passed and your previous infraction has been erased from your file.
15. If you have a seasonal vehicle, ask for seasonal rates Say you’ve got two cars: a clunky but dependable minivan for year-round use and a sexy 1949 Model T Ford for summer cruising. Obviously, you need to insure both, but there’s no reason to pay similar rates.
The Model T should be classified as a seasonal vehicle. If you paid $200 a month to insure it between May and October, you might only have to pay $40 a month in storage insurance during the blustery months.
16. Don’t be so comprehensive If you have an extremely old car, you might consider foregoing collision and/or comprehensive coverages, which are optional. It’ll reduce your premium, but there’s a downside: if you get into an accident and the vehicle is trashed, you won’t receive any coverage, even if you’re faultless. On the other hand, junking that beater might be the excuse you were looking for to buy a brand new ride.
17. Young men: don’t drive It’s a fact borne out by statistics: men under 25 are the biggest insurance risk. If you fall into this beleaguered category, you may want to restrict yourself to public transit until your 25th birthday.
18. Buy in bulk Most insurance companies advertise combo deals, where they offer to cover not only your automobile but your house and boat as well. Give this some honest thought — it could save you 15 to 20 percent on car-insurance premiums.
19. Cover yourself, always Your policy is up for renewal, but you’re just about to leave for a month-long cruise. You decide you’ll deal with it when you get back, tanned and rested. Bad call. Insurance companies hate any lapse in coverage, even if it’s only a matter of days. If you go uncovered for any period, once you do renew, your insurer may decide to boost your rates.
20. Drive carefully Ask any insurance agent and they’ll tell you: the most effective way to keep your premiums low is to be sensible and cautious on the roads.
Andre Mayer is a writer in Toronto.