Insurance is all about managing risk. Driving a car is a risky business. So, in a nutshell that is why our Canadian car insurance quotes are high. If there are so many things both under our control and not under our control conspiring to damage our car it is no wonder our premiums are hard to keep low. So, how do the different risks we face as drivers in Canada affect our insurance rates?
On this Page:
• Auto Insurance Quotes Provincial Averages and quote factors
• High Risk Auto Insurance in Canada and Reducing your Premium
• What about Auto Insurance Brokers?
• Auto Insurance Canada: Insurance terms defined
How Canadian Auto Insurance Works
In Canada, and in general, insurance works by many people paying money to the insurance company and few people drawing funds out. When someone has an accident — very few in any given year — and makes an insurance claim, money is drawn out of the collective pool stored with the insurance company. Since far fewer people take money out than contribute everyone’s claim can be paid.
In Canada, car insurance is paid annually in order that adjustments may be made (sometimes even downward adjustments!) depending on how much the insurance company expects to pay out in the coming year. A particular person’s insurance rate is determined by how likely the insurer thinks it is that you will make a claim in the coming year. So if you are considered to be more likely to make a claim you will pay a higher premium. If you are considered less likely to make a claim you will pay a lower premium. Many factors go into calculating the likelihood that you will make a claim. Some of those factors are even under your control — good news!
|Where your insurance dollar goes|
|Govt. insurance taxes||16%|
|Company operating costs||20.5%|
|Insurance Company Profit||10.5%|
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|Provincial Insurance Information Including avg. Auto Insurance Quotes|
|Province||Private Insurance||Government Insurance||Minimum 3rd Party Liabil. Coverage||Avg. Premium|
|BC||mix of public and private insurance||$200,000||$1113|
|Manitoba||mix of public and private insurance||$200,000||$1027|
|Prince Edward Island||yes||no||$200,000||$649|
|Saskatchewan||mix of public and private insurance||$200,000||$1049|
Vehicle insurance quotes in Canada are determined by many different interacting factors. Some of them are under your control, some are not. There are even some factors that fall somewhere in the middle, such as car type. For instance, right now you may not be willing to surrender your beloved auto for one that is less costly to insure, but next time you are in the market for a new or new-used car you will be aware that some cars are cheaper to insure than others. At that time you may be ready to add car type to your list of car-buying criteria. The list below is not exhaustive but it will give you an idea of what you can and cannot do to economize. You can suddenly go from age eighteen to age fifty (or readily change your gender) which would give you a nice drop in premiums. You can, however, improve your driving habits and even take a safe driving course both of which would save you money in the long run.
- Place – Where you live can have a large impact on your insurance rate. Rural Alberta is generally a lot cheaper than urban Calgary. With greater congestion in urban areas it just makes sense that more accidents will happen. This is not something most people want to do something about just for the sake of insurance but it is good to keep in mind if you are looking for reasons to go rural.
- Driving Activity – This is affected by where you live and what your driving habits are. Do you do a lot of highway driving or city driving. Are you in your car at night a lot? Do you drive on slippery Canadian roads frequently? All these things are part of what goes into considering your premium.
- Age – younger drivers face stiffer premiums due to inexperience and often less responsible attitudes to driving. Insurance companies will take into account good grades at school and whether you are married or not, and these can have the affect of lowering your insurance rates even if you are young. (Good grades and marriage often mean a more responsible and sober lifestyle.) Not something we can do a lot about changing except by being patient.
- Gender – Men do have a reputation for more risk-taking in all activities — not just driving — and the willingness to engage in risk affects insurance costs. Most of us are happily stuck in our gender.
- Driving History – The mistakes we have or haven’t made while driving can’t be undone but we do have some control over our future actions behind the wheel. The fewer accidents and tickets we have the lower our rates. This is one of the biggest factors determining how risky we are seen to be to insurance companies and one over which we have the most control! Don’t neglect snow tires, too, some companies make a point of asking if you use them.
- Safe Driving Courses – Related to driving history is taking courses to improve your safety knowledge and driving habits. In Canadian winters especially good driving knowledge can save you from an accident.
- Car type – This plays a bigger part than you might expect. By type is meant make, model, and year as well as type of car. Do you own a sports car? It will have a much different insurance profile than will a minivan. Make, model, and year can indicate many things: is the car more likely to be stolen? Is it more likely to get into accidents? And it may seem strange, but some cars have a worse record than others when it comes to property damage! See the charts below (info from the Insurance Bureau of Canada).
High Risk Auto Insurance in Canada
Insurance providers score drivers on a complex mixture of factors including driver history and their history with insurance companies. If a driver has a poor driving record with many accidents and tickets he is considered a high-risk driver in need of high risk auto insurance. Similarly, even though a driver may have a good record if there is documentation showing that he or she missed premiums or cancelled an insurance policy without notice then he or she is also considered high risk. Other likely reasons that you may get categorized as high risk include impaired driving convictions and being an inexperienced driver. In all these cases a significant boost in premiums is to be expected. In some cases it may be difficult to find a company willing to insure you at all or only at a very high rate.
- take a province-approved defensive driving course;
- if you have a car with a bad safety record or otherwise high profile with insurance companies it’s probably a good idea to trade in for a new safer more conservative vehicle [see the table below];
- you’ll have to prove yourself if you are a new driver or have a bad driving record so follow all traffic rules so that you don’t get any tickets: even seat-belt infractions and failing to stop at a stop sign;
- drive safely and defensively. The longer you can remain without an at-fault accident or traffic violation the faster your insurance rate will decrease.
Auto Insurance Quotes affected by Model
|Collision Insurance Rating||Comprehensive Insurance Rating|
|Ten BEST Models||1. The BEST!|
2001 Miata Convertible
|1. 2000 GMC Safari Wagon 2WD|
|2. 2000 Pontiac Montana minivan||2. 2000 Hyundai Accent 4dr|
|3. 2001 Pontiac Montana minivan||3. 2000 Ford Focus Wagon|
|4. 2000 GMC Safari Wagon 2dr||4. 2001 Pontiac Sunfire 4dr|
|5. 2002 Chevy Silverado 2wd||5. 2001 GMC Safari Wagon 2WD|
|6. 2000 Ford F150 2wd||6. 2000 Pontiac Montana Minivan|
|7. 2001 Kia Sephia 4dr||7. 2003 Chevrolet Corvette Convertible 2dr|
|8. 2001 Buick Le Sabre 4dr||8. 2000 BMW Z3 Roadster 2dr|
|9. 2000 Chevrolet Venture EXT Minivan||9. 2000 Pontiac Sunfire 4dr|
|10. 2000 F150 4WD||10. 2001 Ford Taurus Wagon|
|Ten WORST models||The WORST! |
1. 2008 Mercedes-Benz S450V/S550W 4Matic 4dr
1. 2006 Chevrolet Trailblazer 4dr 4WD
|2. 2009 X6 4DR AWD||2. 2006 Acura RSX Type S 2dr|
|3. 2011 Mitsubishi Lancer 4dr||3. 2006 Ford F350 SD 4WD|
|4. 2006 CLS500/CLS55 4DR||4. 2006 Hummer H2 4dr 4WD|
|5. 2009 Mercedes-Benz GL320/GL450/GL550 4dr AWD||5. 2007 Ford F350 4WD|
|6. 2011 Hyundai Genesis 2DR||6. 2010 Toyota Sequoia 4dr 4WD|
|7. 2011 BMW X5 4DR AWD||7. 2005 Ford F350 4WD|
|8. 2007 Subaru Impreza WRX/WRX STi 4DR AWD||8. 2009 BMW X6 4dr 4WD|
|9. 2011 Mitsubishi RVR 4DR 4WD||9. 2005 Ford Escalade 4dr 4WD|
|10. 2010 Dodge RAM 3500 4WD||10. 2005 Acura RSX type S 2 dr|
It is commonly thought that car colour and whether your car is domestic or imported affect your premiums. Neither does.
Car insurance quotes – how to reduce them:
- drop collision coverage on an old car. The cost of repairing the car may be more than what the car is worth;
- get a “bundle” discount by insuring your house and auto with the same company, or using t he same insurance company if you have more than one car;
- increase your deductible (see definition below)
- next time you buy a car consider the make, model and year. Take a look at this pdf on choosing an auto with a low insurance profile.
- drive carefully and responsibly to avoid getting in an accident or getting tickets;
- use your car as little as possible and try not to drive in difficult conditions like dark rainy nights or good old Canadian snowstorms;
- get an anti-theft device and let your insurer know about it;
- be careful who you let drive your car. It’s ok to lend your car but your rates will be affected if he/she has an accident.
What about Auto Insurance Brokers?
Now that you have some idea of what you are looking for when seeking a quote, who do you purchase it from? When you consider how much it costs and that you can save a good amount of money through shopping around the next thing to consider is who to approach.
- You can buy straight from an insurance company. A list of these companies is available from Canadian Association of Direct Relationship Insurers
- You can buy from an insurance agent. Unlike auto insurance broker, agents sell from just one company; the best way to find them is through someone you know and trust.
- You can buy from a broker who tries to get the best price possible from a range of companies.
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Auto Insurance Canada Definitions – you’ll need to understand these when negotiating
Deductible – If making an accident claim this is the amount that the insured person will pay before the insurance company will cover any cost. For example if your deductible is $400 and the cost of repair after an accident is $1000, the insurance company will pay $600.
Accident Benefits – Coverage that allows for medical and income replacement in the case injury during an accident.
Comprehensive Automobile Coverage – Insurance in case damage by various acts or event. e.g, fire, vandalism, flood
Collision Coverage – Optional coverage in case of collision usually with some level of deductible.
High Risk Auto Insurance – Those with poor or no driving record may need special insurance from companies specializing in high-risk insurance.
Liability – Liability insurance pays for losses determined to be caused by the insured.
No-Fault – Car insurance that compensates (by your own company) for personal injury no matter who was at fault in the accident. This doesn’t mean premiums aren’t affected. Increase in your next vehicle insurance quote is likely if you are found to be at fault.
Quote – The insurance company’s estimate of your premiums dependent upon many factors such as your age, the car you drive and so on.
Third-Party Liability Insurance – Coverage provided in case the insured person causes bodily or property damage to another for which he/she is held responsible.
Canadian auto insurance is complex and ever-changing. Car insurance in Ontario especially so with the current attempts to push rates down. Other provinces like New Brunswick, PEI and Newfoundland seem to have their regulations working well for the most part. At any rate, with the help of good information and knowledgeable brokers and agents, prospects are good for getting the best quote and premium possible and moving on to enjoying the use of your car with peace of mind.
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Be careful out there! There are so many ways to get in an accident – some of them are intentional unfortunately – even people throwing themselves at your car.