How to Save on Car Insurance: Seven Ways to Lower Your Rate
Friday, 10 November 2023
With inflation leading to an increase in daily expenses for Canadians, people all over the country are looking for ways to spend less money so that they can better manage their budgets, pay off debts, and save for their future. In some cases, this might be as simple as making adjustments to your lifestyle and spending habits. Maybe you go out for dinner less frequently or unsubscribe from that streaming service you rarely use. Since these hobbies and interests are probably not integral parts of your life, making these changes could be pretty easy and help cut your costs significantly.
That said, there are several aspects of life that are unavoidable and mandatory. Take auto insurance, for example. If driving a car is your only option or the most convenient way for you to get around, you will need to have an active insurance policy in place. Without one, you would be breaking the law and could be on the hook to pay a significant amount of money in the event of an accident or lawsuit. That’s why taking the time to find an insurance policy with great protection at a price that makes sense for you is important. In this blog, we’ve provided some tips you can follow so that you know how to save on car insurance.
How to Save on Car Insurance
So you’re probably wondering, “How can I lower my car insurance?” Fortunately, there are many ways to save on car insurance available through the insurance provider you purchase your policy from, as well as through some of the actions you take with your car. Check out our list of car insurance tips below so you can start enjoying a little more financial freedom.
Shop Around with an Insurance Group
When it comes to auto insurance, there are a lot of options out there. When you are in the shopping stage of securing a policy, it is recommended you request quotes from several insurance companies. As you review the details of the quotes you receive, you might notice that insurance providers offer varying degrees of coverage at different prices from their competition. Ensuring that you do your due diligence and research different providers is a great way to find a policy that provides the best protection at a price you are happy with.
Now, with multiple options at your disposal, you might find it a little overwhelming when you start comparing your quotes. If so, an insurance brokerage can help make this process much easier. As an intermediary between the client and multiple insurance companies, they are impartial when recommending a policy. This way, you can assure yourself that you are receiving unbiased advice when reviewing the different policies available to you.
Keep a Good Driving Record
One of the most effective ways that you can keep your auto insurance rates down is by being a safe driver. Before an insurance company commits to providing you with a policy, they will review your driving history. During this process, they will look for any accidents, traffic violations, and previous claims to determine the level of risk you pose as a driver.
A clean driving record that is free of any of the above-mentioned items can positively impact the amount you pay on your premium. However, any incidents found during this assessment will likely lead to you paying more for insurance. It's important to note that the exact impact of a clean driving record on your insurance rates can vary depending on the insurance company and your individual circumstances, such as your location, the type of coverage you need, and the make and model of your vehicle.
Increase Your Deductible
Another tactic you can use to lower your car insurance premium is to increase the amount of your deductible, which is the amount you would be required to pay in the event of a claim. For example, if you are involved in an accident or if your car is stolen, you will have to pay the deductible before your insurance provider covers any subsequent costs for repairs, replacements, legal fees, or medical expenses. Before making any adjustments to your deductible, there are a couple of factors that you should keep at the forefront.
The first is your current financial situation. If you increase your deductible, you will be spending less per month (or annually if you pay upfront) on your premium, leaving you with more money in your bank account. However, you should make sure that the increase in your deductible will not be a financial burden if you need to file a claim. The second factor to consider is your claims history. If you are prone to accidents, it might be wise to keep your deductible at a lower amount. In the event you need to file multiple claims in short order, you would need to pay that deductible each time, meaning you likely spent more money on claims than what you were saving on your premium.
Choosing to bundle auto and home insurance policies together is a very common way that people can save on their insurance. By combining both of these policies with one insurance provider, you might be eligible for a multi-policy discount, which can result in lower premiums on both policies and save you hundreds. You may also receive a reduced deductible for claims that involve both your vehicle and house. For example, if a car accident were to cause damage to your garage, you may have a single deductible to pay, which can be more cost-effective than paying separate deductibles for each policy.
Another way that bundling reduces your premiums is due to the fact that it reduces administrative fees for insurance companies. When you bundle your insurance policies, the insurance company can streamline administrative processes, which can lead to cost savings. Since this lowers the amount of policies they have to process and manage, they may see a reduction in their overhead costs, and some of those savings may be passed on to you in the form of lower premiums.
Take Advantage of Discounts
In addition to bundling, safe driving, and increasing your deductible, there are many other discounts available to eligible policyholders. Here are some examples of how to save on car insurance with discounts that may be available to you:
Is there another person or additional people in your household who drive separate vehicles? If so, by insuring these cars on the same policy, you may be eligible for a multi-vehicle discount. This can result in lower premiums for each vehicle on the policy.
Establishing a long-term relationship with your insurance provider can lead to discounts on your premium. If you are happy with the service you have received from your insurer, it might be in your best interest to renew with them each year.
Insurance companies usually set specific eligibility criteria for their loyalty discounts. These criteria vary from one insurer to the other but may include the number of years you've been insured with the company, having no significant claims on record, and the absence of late premium payments.
Anti-Theft Device Discount
With the rise in car thefts across Canada, installing anti-theft devices in your vehicle, such as an alarm system, a GPS tracking device, or a steering wheel lock, can make you eligible for a discount.
With these measures in place, the risk of theft or a lost car is far less, which will directly lead to a decrease in the amount of claims and payouts for the insurance provider. Not to mention, it also gives you added peace of mind knowing that you’ve taken the proper steps to prevent your car from being stolen.
Winter Tire Discount
As a driver in Canada, one of the most challenging obstacles during the winter months is snowy and icy roads. While plows do their best to clear the streets as early and often as possible following a snowfall, some days, it’s nearly impossible to avoid.
Opting to swap out your regular tires for winter tires is highly recommended, as they allow your car to handle the unpredictable road conditions of winter more effectively. With them on, you will have better traction and handling while driving, which will mitigate the potential for an accident to occur. In some provinces, using winter tires may qualify you for a discount and is even mandated by law.
The location in which you park your car can impact how much you pay for your insurance. For instance, parking on the street will likely cause you to pay more compared to parking in your driveway, as there is an increased risk of it being damaged by other vehicles or pedestrians.
Furthermore, taking that a step further and parking your car in a garage is a far more cost-effective approach, as your car will be protected from weather-related damage, theft, and vandalism. If your home or the building you live in has a private and secured garage, be sure you make use of it. Taking this proactive approach is strongly recommended by insurance providers as it provides many benefits to everyone involved.
Low Mileage Discount
If you know that you will be driving your vehicle less frequently, you might qualify for a low mileage discount. Whether you started working from home, have a shorter commute to work, or will just be relying on different modes of transportation to get around, the decrease in the mileage you put on your car typically correlates with a reduced risk of accidents. Basically, if your car is on the road less, the chance of filing a claim drops significantly.
Driver Training Discount
Due to their unfamiliarity with being behind the wheel, young or inexperienced drivers are typically viewed as a higher risk by insurance providers. If you fall into this category and want to better prepare yourself for driving on your own, you should consider enrolling in an approved driver training program. Once completed, you should provide proof to your insurer so that you can receive a discount on your premium.
In Canada, many insurance companies offer discounts to students. One of these discounts is given to students with good grades. Car insurance providers recognize that students who excel academically tend to exhibit responsible behaviour in general. To be eligible, students typically need to provide proof of their grades through a report card or transcript. Another available discount is for students who move at least 100 km from home to attend school. This discount requires evidence of enrollment at an educational institution and proof that the car is not being used at the school location.
Discounts for Seniors and Retirees
Conversely to new and inexperienced drivers, seniors and retirees are often viewed as some of the safest people to insure, given the added experience they have as drivers. There is also the likelihood that their lifestyle has changed, and they will be driving less often. To be considered eligible for these discounts, you must be in your 50s and 60s. If you are in this demographic and have a clean driving record, a discount on your insurance is certainly possible.
Green Vehicle Discount
In some cases, insurance companies in Canada offer auto insurance discounts for electric and green vehicles. Due to advanced safety features, these vehicles tend to have lower accident frequencies and a lower risk of fires and explosions, making claims less costly for insurers. Government incentives for green vehicles can also contribute to lower insurance costs. The price for your insurance, however, may also depend on the make and model of the car, as some are more expensive to repair and purchase replacement parts for.
Buy an Insurance Friendly Vehicle
The term “Insurance friendly” can be applied to several types of vehicles. Generally speaking, this could pertain to cars that are older and smaller, are equipped with advanced safety features, and have lower accident and theft rates. If you are in the market for a new car, be sure to keep these features in mind and request multiple quotes for the different makes and models you are interested in so that you pay as little as possible while still receiving optimal coverage.
Pay in Full
If your budget allows for it, one of the best ways to save on car insurance is to pay in full at the start of your policy. When you pay in monthly installments, there is often an additional fee charged included in each payment. This also eliminates the risk of missing a payment and incurring a late fee if you don’t have automatic withdrawals set up or forget to move funds into the account where your insurance premium is drawn from.
Insurance Made Easy with BIG
Hopefully, you have a better understanding of how to save on car insurance. As you can see, saving on auto insurance can be a pretty simple process. It should be noted that the tips and discounts outlined in this blog will vary by province and insurance company, so be sure to check if these offerings are available in your area. For further details on how to get lower car insurance rates, contact a BIG broker or request a quote today.