Driving a car is a necessity for many Canadians. Once you’re behind the wheel, whether you’re just learning, enjoying Sunday drives, or commuting every day, there’s always a chance of something going wrong. You share the road with fellow drivers and pedestrians, so you’ll need to be careful as well as be prepared in case something unexpected happens. That’s why it’s important to obtain auto insurance and understand how it works.
There are a few important factors that affect the selection of your insurance provider, and we’re here to help you figure things out.
Types of auto insurance and how to choose one?
In Canada, the minimum level of insurance required varies depending on which province you live in. Familiarizing yourself with your province’s territory and requirements is essential. The most basic type of insurance is liability coverage, which is also mandatory in Canada and protects you against paying for damage you may cause to someone’s property. It also protects you in case someone else is injured or killed as a result of an at-fault accident committed by you.
Collision coverage is the second type of insurance. In addition to protecting you from third-party liabilities, it also covers you in case you hit something other than a vehicle, for example, a guardrail or embankment. Comprehensive coverage is another type of insurance that provides the broadest range of protection. It covers medical bills, collision-related damages, and may protect you in case of floods and theft.
Note that selecting a suitable insurance policy can sometimes be overwhelming, so you might want to hire an experienced broker from an established company. For example, BrokerLink is one of Canada’s largest and most reliable insurance brokerages that will help you get the best quote and find the perfect policy at a great price. Make the process of buying insurance much easier, and make sure you get a plan that protects what’s important to you.
Factors that affect the selection of auto insurance
It’s important to know that although auto insurance is mandatory in all provinces across Canada, there are still some key differences depending on where you live. Note that the rates you’ll have to pay for the level of coverage can greatly vary from province to province. For example, where you live in Ontario can affect the cost of your insurance premium. Usually, more auto thefts and accidents happen in bigger cities, so you will likely have to pay more for your insurance if you reside in a larger city.
- Vehicle make and model
Insurance companies usually use CLEAR (Canadian Loss Experience Automobile Rating) to evaluate data for every year, make, and model of vehicles. They use this information to predict which vehicles are more likely to get involved in a claim, and how high a potential payout may be. Generally, rates are higher for newer and sports cars. Note that your car’s safety features can help lower the premium. Keep in mind that insurance companies usually look at the chances of your car being stolen or damaged, and how much it will cost to repair it.
- Age and gender
Auto insurance companies use statistics to determine how likely a person is to be in an accident or make a claim. Age, gender, marital status, and occupation are some of the common factors that may affect your insurance rates. For example, if you’re under 25, you’re more likely to have a higher premium as inexperienced drivers are more likely to be involved in an accident. Additionally, your gender can also influence the cost of your insurance coverage. Keep in mind that males often tend to have higher premiums than females.
- Driving record
It’s important to know that your driving history is a big factor that affects your insurance rates. Some of the things that can impact your coverage include the number of years you’ve been driving, how safe you’ve been driving, the number of years you’ve had insurance, and others. Additionally, if you have any convictions, traffic violations, or are considered a high-risk driver, it could also increase your car insurance premium. On the other hand, if you’re a safe driver who’s never received even a speeding ticket, you might be able to save a lot of money on premiums.
Insurers usually consider various factors to set an auto insurance premium, so make sure you’re familiar with how that works. Your residence, driving profile, and demerit points can greatly affect your insurance rate, so consider consulting an expert to help you get a good deal. Shop around to save money, and think about raising your deductible so save a substantial amount on your monthly premiums.