I Am A Good Driver!

You’re a fantastic driver. No tickets or accidents on your record for over 8 years. Why are you paying so much for auto insurance? Let’s begin with a quick explanation of how the actuaries create your premium.

Insurance rates are generated by combining all the factors that can make rise to an accident. Your vehicle make, your accident and ticket history, kilometers driver, years licensed and most importantly your location all have a say in your premium.

Why is location so important to insurance companies…?

When companies see that there are many claims for one postal code, it may tell them few things: people don’t drive carefully, it is a congested area and prone to collisions, vehicles may be more expensive which costs more to replace…etc. High claims volume is directly correlated to higher risk (no brainer).

Here is where it gets interesting. Since Ontario’s insurance isn’t sold through the government, each insurance company will have different claims statistics for every postal code! Intact Insurance may have many claims for the L5B postal code in 2014 while Aviva Canada had very little. In this case, Aviva will give better rates. Keep in mind that these rates change very often. The company you thought had the best rates for five years may be on the expensive side this year (and you wouldn’t even know).

Insurance companies are constantly updating, adding and removing discounts as well. This year, Travelers Insurance introduced a completely new product which included new discounts and increased older ones.

To conclude, in order to keep your auto insurance premiums as low as possible, you need to constantly be on the market. Check as many insurers as you can. Make sure you are getting all the discounts and be on the lookout for new ones.

Please remember: price is very important, but coverage is paramount. We already pay an arm and a leg for Ontario auto insurance… might as well be covered. Ensure you have adequate limits, correct deductibles and proper endorsements.