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How to save on car insurance

If you're like a growing number of drivers, you're feeling the pinch of high costs to stay on the road. Currently gas prices are getting all the press, but car insurance is never far behind.

The days of huge hikes to car insurance are past, at least for now, but rates vary greatly and it's instructive to take a look at what factors affect your premium and how can you get the best deal.

Driving record is No. 1
Your driving record is number one when insurance companies look at setting your premium rate. Experts say, "Keep your record clean" but it's worth digging a little deeper into just how much driving infractions impact your premium.

Ann Marie Thomas of InsuranceHotline.com notes that there are three categories of driving offences -- minor, major and serious -- and these have an escalating impact on your rates.

The minor category can include up to three non-criminal offences; for example, speeding or seatbelt tickets. One such offence might not increase your premium directly, although Thomas points out that it may well result in losing any discount you've been receiving for having a clean record.

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Once you hit three offences you will likely find you're now covered by a "high-risk" company and your premium will be substantially higher. One Toronto driver in this situation saw his premium go from $1,800 to almost $6,000.

"The rules differ from company to company," says Thomas, "but it's important that drivers are very vigilant, especially in summer when there are construction zones and you may not notice that the speed limit is lower in those areas."

Something else drivers may not realize, says Thomas, is that if you have three offences on one day (for example, you were speeding, talking on your phone and not wearing a seatbelt) it's considered three separate infractions, not one, thus taking you to the minor category limit all in one day.

Escalating offences = escalating costs
Once you've moved into the major offence category you'll see your base rate jump with all the additional surcharges for various offences. "For example, one improper passing of a school bus can take your 10-star basic rate to a 4-star one," says Thomas. This could mean that instead of a base of $1,000 it jumps to $1,400, she says, with an additional 15 per cent surcharge for each conviction on top of that.

Under the highest serious offence category (for example, impaired or careless driving convictions) you'll not only see premiums double, you'll carry a bad driving record for six years instead of the three years for minor offences.

(continued on next page)
-- Posted May 25, 2012
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