When you see auto insurance commercials on tv or on Youtube, they often make a lot of big money-saving claims. The thing is, have you ever tried to actually get those advertised rates or discounts? It can quickly turn car into a game of pin-the-tail-on-the-gecko donkey. Good news though! You can get your target price by doing five simple things.
1. Review your policy and deductible
In Ontario you are required to have auto insurance and a minimum level of coverage. That being said, you may actually be able to trim parts of your current policy or increase your deductible to lower overall costs. Doing this will help you to understand more about the car insurance basics, such as which types are optional.
For example, does your policy reimburse you for a rental while your car’s getting service done, cover mechanical systems, or include emergency roadside assistance? These may not be absolutely necessary, such as the rental option, with our Finch Pick It Up service. These types of coverage aren't a necessity, and cutting them out of your policy should lower your monthly costs. You just be sure about the amount of risk you feel comfortable accepting.
Those feelings should also impact the decision around your deductible. Higher deductibles (the amount you pay before the insurance company chips in) come with lower premiums (the amount you pay to the insurance company each month/year), but make sure you opt for the right level of protection for you and your vehicle. It's not always about the lowest costs.
2. Clean Up Your Driving Record
If you are a higher-risk driver, everyone knows you will be charge higher premiums, such as if you’ve had an accident or a moving violation in the past. The key is to understanding and addressing your driving record, and how to help put yourself back in an insurer’s good graces.
Speeding tickets, DUIs, and other reckless driving behavior will cost you points on your license. The amount of time those points stay on your record will depend on where you live and what type of violation it is. Having a good driving history obviously helps when shopping for auto insurance, but just because your history may have some spots, doesn't mean you're out of luck. Some insurance companies offer savings for taking defensive driving classes, safe driver programs, or driver’s education for younger drivers. If it’s been a while since your last accident, you may be eligible for a discount as well.
Insurers sometimes also provide devices that plug into your on-board diagnostics port to monitor your driving. This way if they detect good driving behaviour, they may lower your rate, and promise that this practice will never result in your rates increasing.
3. Consider the Car You’re Insuring
A fancy sports car, or something with a bigger engine may not seem like it costs much more when you’re at the dealership. However that feeling might change once you factor insurance into your car-buying budget. The more expensive vehicles will always have higher insurance rates.
That being said, some bells and whistles can help offset those higher premiums. It's good to ask your insurer if safety features like antilock brakes and airbags, or advanced safety systems like collision warnings and automatic emergency braking, will earn you a discount.
Saving on insurance costs is one among many good reasons to buy used cars. Due to their likely lower sales prices, these cars cost less to insure—even if they’re “like new” or a demo. If you purchase a very inexpensive used car, it might even make sense to scale back on optional collision coverage, which covers repairs up to your car’s market value, minus your deductible.
4. Drive Fewer Miles
When shopping for auto insurance, you will be asked a bunch of information about you and your vehicle, such as how many miles you drive each year. The reason for this is the less you’re on the road, the less likely you are to be in an accident. So, consider alternate options to getting around town or commuting to work, such as can you carpool with someone else? Or is there reliable public transportation in your area? These options won’t be possible for everyone but taking advantage of them—and letting your insurer know may save you money, and help the enviroment.
5. Students: How’s Your Report Card?
Statistically, young drivers are riskier to insure, and drivers ages 16 to 19 are more at risk of motor vehicle crashes than any other age group. Good students may hold traits that counteract traditionally risky behavior, such as being responsible or hard-working.
Most insurance companies offer discounts to students who are younger than 25 and have good grades. Typically, that means having at least a “B” average (3.0 GPA), and being on the honor roll or Dean's List. You’ll need to prove this with documentation like a report card or letter from a school administrator.
Other Factors Insurance Companies Consider
Auto insurance companies have done a ton of research over the years to determine who presents the biggest risk on the road. If you check off some predetermined boxes, your rate may be comparatively higher, regardless of any other steps you take.
Factors like age (under 25; over 65), gender (male), or being single will automatically hike your rate. Where you live may also make a difference. If your neighborhood has a lot of traffic and crime, or you're in a big city, you’ll pay more for coverage than someone with a similar risk profile who lives in the countryside.
The Bottom Line
You can easily pay less for car insurance by minimizing coverage or increasing your deductible, but don’t let optimism bias tempt you! Instead of taking on the burden of risk, research options that help you stay safe and pay the lowest possible rate. And, of course, do your research, ask questions, and get multiple quotes to score the best deal.