How To Save Car Insurance

How to Save on Car Insurance

In Canada, having a car is often a must, but the cost of insuring it can really stretch your budget. This blog is here to help you cut down those insurance costs without losing the important coverage you need. 

If you’re looking for ways to help you save money so you can spend it on things that bring you joy instead, keep reading. Whether you’re a city driver in Toronto or enjoying the quiet roads of Nova Scotia, we’ve got some practical ways to keep your car insurance bills lower, making your life a little easier.

How much does car insurance cost?

The cost of auto insurance in Canada can change a lot depending on where you live, your driving history, the kind of car you have, how much you drive, and the type of insurance you choose. Each province and territory in Canada has its own way of handling car insurance, which can be through the government, private companies, or both. This makes prices different from one place to another.

Here’s a quick look at what you might expect for car insurance rates in some parts of Canada:

1. British Columbia, Manitoba, and Saskatchewan have government-run insurance and tend to have higher prices. For example, people in British Columbia might pay more than $1,800 each year on average.
2. Ontario has some of the highest insurance costs, where drivers often pay between $1,500 and $1,800 per year. In large cities like Toronto, it could be even more.
3. Quebec has the lowest prices, with a mix of public and private insurance. Drivers there can expect to pay around $700 to $1,000 every year.
4. Alberta and other provinces with private insurance might see yearly costs of about $1,200 to $1,400.

While these are averages, your own car insurance costs can vary based on things like how long you’ve been driving, your driving record, how often you use your car, and what coverage you opt for.

To get the most accurate idea of what you might pay for your car insurance premium, it’s best to get several quotes from various local insurance companies.

What are my options for car insurance coverage?

In Canada, when it comes to car insurance, there are some coverages that are mandatory, like basic liability insurance, and others you can choose to add on for more comprehensive coverage, like collision or all perils. Here’s a breakdown to help you understand your options:

Mandatory coverage across Canada

Third-party liability coverage: This is required across Canada and covers you if you’re responsible for causing bodily harm or if you damage someone else’s property while driving. The minimum coverage amount varies by province but is typically at least $200,000, with many people opting for more coverage for better protection.

Accident benefits coverage: This covers medical expenses, rehabilitation, loss of income due to disability, and funeral expenses in the event of injury or death, regardless of who’s at fault. The specifics of this coverage can vary significantly from one province to another.

Mandatory coverage in parts of Canada

Uninsured motorist coverage: Protects you and your family if you’re injured or killed by an uninsured driver or in a hit-and-run. It also covers damage to your vehicle caused by an identified uninsured driver to a limit.

Direct compensation-property damage (DCPD): If you’re in an accident where you’re not at fault, your own insurance company will pay for the repairs to your car or the value of your car if it’s a total loss. With DCPD, you deal with your own car insurance company, making the process smoother and faster.

Popular optional coverage

Collision Insurance: Covers damage to your vehicle when you’re at fault in an accident or when the accident’s fault isn’t clear. This includes collisions with another vehicle or an object (like a tree or guardrail).

Comprehensive Insurance: Protects against damage not caused by a collision. This includes theft, vandalism, natural disasters (like hail or a flood), and falling or flying objects.

Specified perils: Offers coverage for specific risks that must be named in your policy, such as fire, earthquakes, hail, or theft.

All perils: Combines Collision and Comprehensive coverages, offering a broad level of protection. It’s the most inclusive option and typically the most expensive.

Various endorsements: These are add-ons to your policy that provide extra coverage tailored to your needs. Common endorsements in Canada include loss of use and accident forgiveness coverage.

20 ways to help you save on car insurance

Saving money on car insurance can seem tricky, but with the right strategies, you can cut costs while keeping good coverage. Here are 15 practical ways to lower your car insurance premiums:

Shop around

Not all insurance rates are the same. Spend some time using online tools to compare prices, or talk to insurance brokers who can do the legwork for you. This way, you can find the best price for the coverage you need.

Bundle your car insurance policies

If your family has more than one vehicle, you can save money by insuring all the cars with the same company for a multi-vehicle discount. Also, look into combining any other auto insurance policies you have, like motorcycle or RV insurance.

Bundle your other insurance policies together, too

If you have more than one type of insurance (like home and auto insurance), getting them from the same company often leads to bundling discounts as well.

Choose a higher deductible

A deductible is what you pay out of pocket before your insurance covers the rest. Agreeing to a higher deductible can lower your monthly bill. Just make sure you have an emergency fund to cover this deductible if needed.

Consider the type of car you drive

Some cars are more expensive to insure than others. Sports cars or luxury cars usually cost more for insurance. If you’re looking to buy a car, check which ones are cheaper to insure. Cars that are safe and not stolen often usually have lower insurance costs.

Go green and save

Choosing a car that’s good for the environment, like a hybrid or electric car, can also help you save on insurance. Some insurers offer discounts for these types of cars. Plus, these cars often come with the latest safety features, which can lower the chance of accidents and make them cheaper to insure.

Make your car safer

Adding anti-theft devices to your car that prevent theft could lower your insurance cost. Also, choosing a car with advanced safety features can reduce your risk of claims, which can lead to lower insurance costs as well. Plus, it gives you peace of mind.

Spend less time on the road

If you’re driving fewer kilometres, especially with changes like working from home, let your insurance company know. Less driving means less risk of accidents, which can lead to lower premiums.

Keep a clean driving record

The safer you are on the road, the lower your insurance costs can be. Avoid speeding and distractions and follow road safety rules to keep your driving record clean.

Take a defensive driving course

Some insurance companies offer discounts if you complete an approved defensive driving course. These courses can teach you defensive driving techniques to help avoid accidents.

Pay your premium all at once

If you can, pay for your insurance for the whole year at one time, as paying for your insurance in one lump sum instead of monthly can save you money. Many companies charge extra for the convenience of monthly payments.

Reevaluate your coverage

If your car is older, it may not be worth paying for collision and/or comprehensive insurance coverage. Check the current value of your car and compare it to the cost of your coverage to decide if it’s worth adjusting.

Regularly review and update your policy

Circumstances change, and so do insurance needs. Make it a point to review your policy annually or after significant life changes, such as moving to a new location, changing jobs, or altering how often you drive. Updating your policy to reflect your current situation can uncover insurance savings you’re entitled to but not receiving.

Use winter tires

If you live in a snowy area, putting winter tires on your car during the colder months can not only improve safety but can also qualify you for a discount from your insurance company.

Consider a program that tracks your driving

Some insurance companies offer a discount if you agree to install a telematics device that monitors your driving habits. Safe drivers can often earn a significant discount.

Keep your credit score high

In most provinces, except for Ontario and Newfoundland and Labrador, a good credit score can mean lower insurance rates. Insurance companies think if you manage your money well, you’re probably a careful driver, too. Make sure to pay your bills on time and keep an eye on your credit report to fix any mistakes.

Advocate for yourself

Don’t be shy about negotiating with your insurance company. If you find a cheaper insurance option somewhere else, tell your current company to see if they can offer a better deal. Also, if something changes in your life that might make you safer to insure, like working from home, tell them that, too.

Look for group discounts

Being part of certain organizations or groups can get you a discount on car insurance. Check if your employer, school, or any clubs you’re a member of offer group insurance rates. These can be significantly cheaper than individual rates.

Ask about a safe driver discount

If you’re in a group that’s usually safer to insure, like people who work from home or are retired, you might get a discount. It’s always worth asking your insurance company about ways to save based on your situation.

Ask about all other possible discounts

Always ask your insurance provider about any discounts you might qualify for. There might be new discounts or ones you didn’t know about, such as for being a loyal customer, having multiple policies, or even for students with good grades.

Conclusion

Getting a good deal on car insurance in Canada can be straightforward once you know how. By exploring your insurance options and making smart choices, you can keep your costs down without cutting corners on protection. Whether it’s choosing the right type of coverage, taking advantage of discounts for insuring more than one car or picking an eco-friendly vehicle, there are plenty of ways to save money.

Always compare prices from different companies, keep a good driving record, and check your insurance plan regularly to make sure it still fits your needs. Don’t forget, you can also save by choosing a bigger deductible, looking into insurance that checks how you drive, and talking directly with insurance companies to negotiate better rates.

Car insurance is something every driver needs, but it shouldn’t empty your wallet. With these easy tips, you’re all set to find the best deal and enjoy the road with a little extra cash in your pocket.