When it comes to obtaining car insurance, your premiums can vary based on several factors. Many consumers are aware of most components, but it is useful to understand the main factors that affect your insurance rates. As a result, you can avoid factors that can increase your premiums and help you qualify for the best rates. Luckily, isure has compiled a list of the eight main factors that almost every car insurance policy uses to base their premiums off of. Read on below to see what they are and what you can do to keep your insurance costs as low as possible.
1. Car make and model
Some insurance companies will charge higher insurance rates for cars based on specific classes. These can be intermediate-performance, high-performance and sports vehicles, including those with rear engines. Each vehicle has it’s own Canadian Loss Experience Automobile Rating (CLEAR). This is based on its claim probability, as well as its cost to repair and replace. Vehicles modified in any way may affect insurance premiums, as well. Lastly, how safe a car is to drive or the likelihood of theft are common factors affecting car insurance premiums. Cars that have an excellent safety rating will likely result in lower car insurance premiums.
For awhile now, men have long been known to be riskier drivers than women. According to the Insurance Institute for Highway Safety (IIHS), men are often involved in collisions that are deemed more severe. On top of this, they are more likely to engage in unsafe driving practices. This includes driving while impaired and speeding. As a result of this, men are known to pay higher insurance rates than women. However, the good news is that once you reach 25, your sex will have less of an affect on your premiums.
When you are under the age of 25, you are considered an “inexperienced driver.” As a result of this, you will typically see higher premiums. Insurance companies assume that your lack of experience will result in you not being able to refine your skills, and this comes with risks. The younger you are, the higher the premium you can expect. With this being said, if you have a clean driving record by the age of 30, you have the potential to be offered a lower rate.
4. Geographical area / postal code
While in most cases, you can choose where you live, you can’t exactly control how insurance providers price certain cities and postal codes. When shopping for insurance, it is important to keep in mind that some companies may pay out a higher amount of claims in a certain city or town. This will result in higher rates with that provider, even if you haven’t filed a claim. This has been criticized as “postal code discrimination.” Though the Ontario premier has suggested that there is a future where your location will not influence your auto insurance rate, it does impact your car insurance premium for now.
5. Use of the vehicle
All vehicles require automobile insurance. However, not all cars are used in the same manner or for the same reasons. Vehicles used for business or commercial purposes will likely require you to purchase business use on your personal auto insurance policy or purchase a separate commercial policy altogether. While the business and commercial premiums are different from typical private car insurance premiums used for regular commuting, you may find they don’t differ substantially from standard individual auto insurance rates. It is essential to get professional advice on if you require business or commercial coverage, as they are very different. Learn more about isure’s business car insurance here.
6. Driving record
All driving records, traffic infractions, and accidents of insured drivers and those that live with them will affect car insurance premium rates. The more severe violations the insured driver has, such as a DUI or leaving the scene of an accident, will result in much higher insurance premiums. Your driving records inform insurance companies of how reliable or risky you are as a driver. It is best to keep your driving record as clean as possible in order to avoid being labeled a “high-risk driver.”
If your car is at home and not driven often, you may also qualify for lower car insurance rates. Some auto insurance companies offer telematics solutions that can result in significant premium savings. Regardless, it is essential you accurately declare your vehicle’s use on your policy to ensure you have the proper rating. Also, as your vehicle use changes, make sure to update your policy. Having an annual policy review with your insurance broker is a great way to ensure your car insurance policy is up to date.
isure insurance provides clients with the best access to affordable auto insurance rates across Ontario. As Ontario’s leading independent insurance brokerage, we offer you high-quality service and fast results you can count on. We can find you the absolute best auto insurance rate and coverage in the shortest amount of time. Get started with us with an online quote by visiting our auto insurance page.