So you’re shopping around for car insurance. What do you need to know? Well, there are lots of ways – at least 11 – that you can save money. Many of these money-saving ideas may apply to you.
- One Insurer, Multiple Policies – Do you have a homeowners or renters insurance policy? If so, is it with the same insurance company that provides your auto insurance? If the answer is no, you’re paying too much – for both policies. Almost every insurance company that sells auto insurance wants its policyholders to also buy homeowners or renters insurance from that company.These insurers offer so-called multi-policy discounts. Usually, these discounts are at least 10% and some insurers apply the discounts to both the auto and the homeowners/renters policy.
- * Tip. Talk to your broker about multi-policy discounts.
- Good Driver, Good Price – It’s no secret that the better your driving record, the less you will pay for auto insurance. But did you know that you can receive a discount of up to 25% by proving how good of a driver you actually are? Simply by installing a small device in your car the insurer can collect data on the time of day you drive, excessive braking and fast acceleration and the distance driven. You’ll get an immediate enrollment discount and the better you score, the more you save!* Tip. Make sure you’re getting the best discount for your driving record. Talk to your broker. And remember, the better you drive, the more you save.
- The Beauty of the Bus (or Other Mass Transit) – Do you drive to and from work? If you do, you are literally paying a premium to do so. Insurance companies charge you significantly higher premiums if you drive to work. And, the longer your commute (in miles, not minutes), the higher the premium.* Tip. Some drivers should consider mass transit. Yes, there’s a price there, too. But you will reap the savings of gas and lower insurance costs.
- Low Mileage, Low Price – On average, people drive 1,000 to 1,250 miles a month. That is what insurance companies consider average use.* Tip. If you drive less than the average, you could be eligible for low-mileage discounts, which some insurers offer.
- High-Profile, High-Cost – The type of car you drive is a major factor in what you pay for insurance. Is your vehicle a magnet for thieves? Is it more expensive to repair than most cars? If the answer to either of the last two questions is yes, you’re paying more than the average car owner for insurance.* Note. Find out before you buy – call your broker!
- Insure all your vehicles on ONE policy – Insurance companies give “multi-vehicle” discounts to policies that insure multiple vehicles. Maximize the discoutns available to you by listing all of your vehicles on one policy or with the same insurance company.* Tip. Some insurers will give a multi-vehicle discount to additional members of your family, so long as you all live in the same house and you’re all insured by the same company, even if the cars are insured on separate policies.
- Drop Unnecessary Coverages – Let’s say you have an older car, one not worth very much. There’s really little point in having collision and comprehensive coverages. You don’t have much to protect. Remember, too, that you have to subtract your deductible from any potential payout you might get.* Tip. As a general rule, any car worth less than $1,000 shouldn’t have collision and comprehensive coverage. Between the deductible and the extra expense of these coverages, the cost is probably greater than the benefit. How much is your car worth? An auto dealer can tell you, or there are plenty of books that have values of vehicles going back many, many years.
- Discounts, Discounts, Discounts – Auto insurance companies offer several discounts for a variety of reasons. The car has a sophisticated after market security system, GPS tracker, or something as simple as snow tires. Or the driver is retired or, at the opposite end of the spectrum, a good student and attends school full time (160 km away).* Tip. Make sure you are taking advantage of all the discounts available to you!
- Go to School – Virtually every insurance company offers a discount to those who have taken driver training. Some even offer further discounts depending on the driving school’s accreditation.
- Low-Cost and High-Cost Areas – Are you planning to move? If you are, you should take into account the cost of insurance. You might be surprised at the difference in price between neighbouring communities.* Fact. Rates can vary greatly from city to city. For example, someone living in Toronto, Brampton or Markham could pay several times more, on average, than someone in Ajax, Whitby or Port Hope.
- Be Loyal – Insurance companies offer increasingly sizable discounts for each year you remain a client. If you move to another carrier you forfeit that discount. Move around too much and you raise red flags with subsequent carriers.
* Tip. When considering a switch to another insurance carrier be aware of all the costs involved in your pursuit of additional savings.