Auto Insurance rates vary based on a variety of factors. Knowing how premiums are calculated can help you control the cost of your insurance and keep it low.
What affects rates?
- Size and performance of your vehicle. Smaller cars can cause your premium to be higher because they sustain more damage in collisions. High-performance vehicles, such as sports cars, tend to be driven more aggressively and therefore often incur a higher premium.
- Value and age of your vehicle. The more expensive and new a car is, the higher the premium.
- Vehicle usage and location. The more kilometres your vehicle has travelled, the higher the premium. Additionally, where you drive and store the vehicle affects your rates as well. If you are in a more densely populated area, with a higher risk of theft or accidents occurring, your premium will also be higher.
- Age and gender. Statistically, younger drivers are at a higher risk of getting into an accident than older drivers. Additionally, studies show that males under the age of 25 get into more collisions than females. Some provinces adjust premiums for different statistical groups to reflect these findings.
- Your driving record. Drivers with past claims are more likely to have future claims. Because of this, your driving history directly affects your auto policy rates.
- Your deductible. If you choose to pay a higher deductible, your premium will be lower. Keep in mind that this means you need to have more cash on hand if an accident occurs.
How can I control my rates?
Many carriers offer discounts based on your vehicle’s safety features—such as anti-lock brakes or anti-theft devices—or for having multiple cars on one policy. Your behavior as a driver can also impact your rates.
Here’s 10 tips for keeping your Auto Insurance Low:
- Research before you purchase. Find out how the size, performance, value and age of the vehicle you are looking to purchase will affect your premium compared to other vehicles you may be considering.
- Choose a higher deductible, but make sure to stay within your means.
- Don’t drive while under the influence of drugs, alcohol or fatigue. Never text and drive. Avoiding these behaviors will lower your chances of getting into an accident, which will help your driving record stay clean and your premium low.
- Drive defensively.
- Use an insurance broker. As insurance brokers we work for the client. We offer quotes from multiple insurance carriers to choose from so you know you’re getting the best deal. Get multiple quotes from several companies in minutes here
- Consider purchasing a car with more safety features.
- Install an anti-theft device. This is an easy way to deter one type of car emergency that would raise your premium.
- Keep your credit in good shape.
- Consider excluding high-risk drivers in your household from your policy. If you choose to do this, make sure these drivers do not get behind the wheel of your car.
- In Alberta, you can save on your premium by using usage-based insurance. This program tracks your driving habits, learn more about it from this video.