Owning (or leasing) a vehicle is a necessity for many of us. And for our kids, buying their first car is like a right of passage – a first taste of real freedom. But freedom comes with responsibility, and owning a vehicle means you also need auto insurance.
And while we tend to rely on our insurance broker to provide us with the protection that we need for our situation, it’s good to know what factors go into determining our premiums. Many of these factors are within our control, so knowing them can help us save money and prevent unnecessary increases at renewal.
How you drive can impact how much you pay. Many insurance companies are promoting the fact that if you are a safe driver, you’ll save money on your premium. And now, there are even apps that can track your driving habits directly to help you save.
But the biggest ‘habit’ to stay away from is distracted driving. Not only is this the most dangerous habit to engage in – it is the number one cause of accidents and road fatalities in Ontario – it comes with some of the most severe penalties. You could face thousands of dollars in fines, demerit points and license suspension. And this would result in an increase to your auto insurance premiums.
Other Factors that Affect Premiums
In addition to driving habits, where you live and the type of car you drive are also factors that can affect your premiums. Here is a list of the other major factors:
Live in a safe, low traffic neighbourhood? You’re likely paying less than your downtown neighbours. Where you live affects your rates, sometimes right down to the postal code. For example, rates in metropolitan areas are typically higher due to the increased likelihood of accidents and theft.
Type of vehicle
Do you like to drive souped up, fast cars or are you the minivan type? SUVs are typically cheaper to insure than sports cars, as are new cars versus older. A luxury car will cost you more, as will a rare or custom vehicle.
Age & Gender
With age comes wisdom…and also lower premiums. Young drivers (under 25) pay more for their insurance as they tend to have more accidents than older drivers. Your gender and marital status will also have an impact on your premiums. (Yes, males tend to pay more due to their higher risk profile.)
If you can work from home more and drive less, you can save as well. How far you drive to work, your average kilometres per year and whether you drive primarily for business or pleasure, all affect the premium you pay. Essentially, the more you drive, the more you pay.
And while you can’t control all of these factors, there are other things you can do to save on your premiums. For example, you can earn discounts by installing winter tires and an anti-theft device, taking a drivers training or defensive driving course, and even by parking in a garage or driveway.
If buying auto insurance sounds complicated, it doesn’t have to be. And while there are many sites that will compare rates and give you online quotes, nothing beats the ability of an insurance broker to assess your unique situation and find the right options and best premium for you.
Let us help you protect what matters most. At Bespoke Insurance, we tailor your policy to your specific needs. Contact us today for auto insurance advice, to review your existing policy or for a quote.