Have your auto insurance premiums increased recently?  Here is how to lower them

insurance increase from wind storm
Insurance companies will use an influx in losses in any given geographic location to increase rates

How to lower auto insurance premiums?

If you have ever experienced a natural disaster you may notice within a year your insurance premiums increase, sometimes as much as 30%.  Even if your vehicle was not directly damaged you may still experience rate shock as a result of this.   Insurance providers are often forced to increase rates to hedge big losses from claim payouts or so they say.  If your auto insurance rates have gone up you may have questions which your broker or agent will usually deflect with blanket responses and point accountability to balancing budgets, that the pool of insurance policies must make up the red ink.   

What is an acceptable way for people to lower the cost of their automobile insurance?

Shop around is probably the most common answer to this question.  This is only part of the task, the other part is comprised of identifying your potential discounts which range from years of safe, claims free driving experience to group discounts.

Winter tire discounts – With winter tire mandates, changing your tires over from Oct 1 to Mar 30 can provide a discount from your insurer.  In some cases switch over to more cold resistant tire compound is required for your policy coverage to remain active. 

Driving behaviour app discounts – There are a few insurance companies like State Farm that are introducing driver monitoring apps and provide a discount when they are implemented.  Beware that the transition over to this can be tricky but as the technology evolves so will ease of use.  

Dash cam installation discount – Dash cams are becoming widely adopted worldwide.  In the event of an accident or crime, footage can be used as evidence.  As a result insurers are encouraging installation by offering discounts up to 15%.

Find a private insurance provider who completes a credit check – Private insurers offer more coverage for lower rates to those who have a higher credit rating as they are deemed less risk to the insurer.   Most often the credit check consists of a “soft” confirmation of credit score and personal information, don’t worry it isn’t a hard pull. Being that this is becoming more and more popular with private insurance companies, public insurance agencies may soon follow. Keep in mind that credit information cannot be collected in the province of Ontario by insurance brokers, please look at our other tips to save below.

Capitalize on group discounts for professional or alumni associations – There are all types of available group discounts that many people searching for insurance deals don’t realize apply.  Employers, alumni associations, professional organizations and unions have group insurance discounts that can save hundreds off premiums.

The forgotten passive immobilizer discount – Most vehicles on the road today have some sort of security system or passive immobilizer built in that will award yet another discount. Usually once your policy is printed off you will see a section for passive immobilizer, this is the time to mention the discount once the above discounts have already been applied.  It can shave off another 5% or more!

Vehicle safety features – Automatic emergency braking is now an applicable discount and included as a standard feature in more and more vehicles.  If this discount is available, most insurance brokers will mention it.

Low annual mileage – If you drive your vehicle less, why pay the same rate as someone who drives more?  This may or may not apply to your situation but usually there are thresholds that if surpassed, the discount is removed.  If you believe this discount applies to you, document your odometer with photos annually to pass along to your broker.  In some cases verification is not required depending on the insurer but your word may come under scrutiny if there is a claim for damage or loss.  Check with your broker for more information.

As a last resort, consider adjusting your deductibles and coverage

Looking closely at your deductible amounts may leave room for a reduction in premiums if they are increased.   Sometimes a $250 deductible doesn’t make sense.  If the deductible is increased to $500 or $1000 it can equate to savings.  The same goes for liability coverage, two or four million dollars may be excessive depending on vehicle usage.  Always keep in mind that if legal action is taken and liability coverage amounts are insufficient, the insured would be personally responsible.    

Does owning a car lower your insurance?

Yes, as owning a vehicle outright can remove conditions of financing agreements that stipulate collision or even replacement coverage.  Still, many will elect to carry collision coverage once their vehicle is paid off.  It may not hurt to let your broker or agent know that you have paid off your vehicle as this may positively impact your risk profile and in turn, lower rates.

Should car insurance decrease every year?

Not necessarily, there are a lot of factors to consider.  Take vehicle value for instance, some vehicles will appreciate in value as they get older and your insurance costs will go up.  Driving and claims history would also influence premiums as safe and claims free years will reduce premiums, the opposite will only increase your vehicle ownership costs.  Sometimes insurers use their own formula to calculate rates, in these cases we recommend you use the above tips to find a better rate with a new insurance provider. 

At what age is car insurance cheapest?

Once a driver has an unrestricted license with seven years of claims free driving history, they can expect the largest discounts so in most cases age is just a number.  Age 25 is a time when large discounts will typically come for drivers who meet the above criteria. That said, experienced drivers who have a claim but previously had many years claims free will get a break.  This would fall under accident forgiveness which is not extended until a safe driving history is established.   

What age of car has the cheapest insurance?

This is typically in the range of vehicle age that does not require collision insurance, most likely for a vehicle under $5000.  This may mean it’s a 2004 Toyota corolla or even a 2010 Toyota yaris, depending on the condition and mileage.    If you are a young driver (or responsible for one), it would be advised to remove collision coverage if the cost for annual premiums comes remotely close to the value of the vehicle itself.  Once collision coverage is removed the cost should come down significantly which may make ownership attainable.

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