Buying a car? You’ll also need to purchase car insurance. Third-party liability insurance is legally required across Canada, and each province and territory has specific auto insurance requirements you should know. While car insurance isn’t optional, it doesn’t have to break the bank.
Here are some easy ways to save money while securing the coverage you need.
Keeping a clean driving record is one of the smartest things you can do to save money on car insurance. Safe driving saves everyone. When you apply for insurance, your broker will ask about your experience as a driver, including your ticket history for the last three years and your claims history for the last six years. They’ll also want to know about the other people in your household, even if you say they are never ever going to drive your car. That’s why it pays to drive safely and encourage safe driving habits among the people you love, too.
If you’re planning to buy a new ride, get insurance quotes while you’re car shopping. The car you buy will have an impact on your insurance premium; some cars cost more to insure. If you are deciding between a few options, you may want to take the price of insurance into consideration. While the model matters, the colour doesn’t. Your insurance provider won’t ask for the colour of your car, so despite the rumours, red isn’t risky.
Talk to the dealership
Ask what protection the car dealership can offer you. Some dealership packages include roadside assistance coverage or a depreciation waiver, which waives the price of repairing or replacing your vehicle due to standard wear and tear. Just be sure to carefully review the dealership package to make sure you understand what coverages you’re receiving. This way, you can avoid paying for the same coverage when you speak with a licensed insurance provider.
Get multiple quotes
Each insurance company uses different calculations and factors to determine how much insurance will cost. One company may be able to offer you a lower price than all the others, so it’s always a good idea to compare prices by getting multiple quotes. (Sorry, there’s no price matching!)
When you speak with the insurance companies, you should also ask if you are eligible for any discounts. In Ontario, for example, drivers who have and use winter tires can save on insurance. It’s always worth checking to see if you could be saving more.
|What will the insurance provider ask? |
Before you call an insurance company, be sure to have all the necessary information on hand, including: your name (it should match the name on the car registration and on your driver’s licence), address, and vehicle details (year, make, model and VIN). You’ll also need to provide your driver’s license number so reports can be pulled to confirm your driving history. You’ll be asked about your daily commute, annual driving distance, and what you use the car for (your coverage will be different if you’re using the car for ridesharing). The exact details requested differ by province. Your credit score, for example, can be taken into consideration in some provinces but not in others.
Bundle your insurance
Bundling all your insurance policies with one company can help you save money. If you already have home or tenant insurance, ask your broker about adding car insurance to your policy. If you’re buying a second vehicle, insuring it with the same provider may give you a price break. If you live with family, you might be able to save by sharing the same policy. It’s also worth speaking with your employer to see if they offer group discounts on auto insurance.
Increase your deductible
One way to save money from the get-go is to carry a higher deductible. A deductible is the amount that you will pay out in the event of a claim. If you increase your deductible, you’ll pay less month to month, but you may have to pay out more in the case of an accident or other unforeseen event. In some car leasing or financing agreements there is a limit to the deductible amount you can carry. In general, we don’t recommend increasing your deductible to lower your premium unless you are comfortable covering the potential cost.
Spend now to save later
Sometimes spending more now can save you more down the road. Most provinces require liability coverage for a minimum of $200,000, but you should consider purchasing insurance for a larger amount. If you are in an accident and sued for more money, you could be responsible for paying the difference out of your pocket.
Purchasing a bare-bones policy may end up costing you. Accident forgiveness and ticket forgiveness are two optional coverages you may want to consider. With accident forgiveness, your first accident won’t impact your insurance premium. Ticket forgiveness, which isn’t available in every province, will also protect your premium if you receive a ticket. Sonnet Insurance, for example, offers both accident forgiveness and ticket forgiveness if you qualify.
If you rely on your car for work, you may want additional optional coverage. With transportation replacement or loss of use coverage, your insurer will provide you with a rental vehicle or pay for your transportation in the event of an at fault accident.
Ultimately, paying a few extra dollars a month for more extensive coverage may give you peace of mind. While some car insurance is mandatory, the kind of policy you purchase should also reflect your needs. If you have any questions about car insurance, reach out to a licensed insurance provider today.