How to Save Money on Your Auto Insurance Policy
Driving isn’t a right; it’s a privilege. The cost of that privilege includes taking on the financial responsibility of owning the vehicle, including keeping it insured.
The average cost of an auto insurance policy varies by province, and you need to be prepared for what it costs to ensure that your vehicle is properly covered. Depending on your situation, you could spend as much as a couple thousand bucks a year. If you’re a young driver the cost can be more than double that, making insurance more expensive than many people’s first cars.
While there’s no avoiding premiums for your auto insurance policy, you can make sure they stay at a reasonable rate with a few handy tips.
Be a good driver
Sounds crazy, right? While premiums may rise or fall depending on what’s going on in the industry, if you drive for a long period of time with a clean record you should be able to negotiate for a lower premium on your auto insurance policy.
Stay away from certain vehicles
People tend to drive differently depending on what they’re driving. As much as it’s unfair, people with cool or sporty vehicles are more likely to get into more trouble than those driving minivans. Insurance companies know this (they collect the data), and they are harder on people who own certain types of vehicles. While the driver is always the biggest impact on a person’s insurance premiums, you can do yourself a favour by buying an economical vehicle that has been rated well for safety.
Increase your deductible
Your deductible is the amount of money you agree to pay out of pocket before getting your insurer involved. By taking on a higher deductible you reduce the risk to the insurer and that means a reward of a lower premium on your auto insurance policy. This means that risk is transferred to you. If you’re a confident driver this could be a great way to save cash on your monthly premium. You should also keep money in an emergency fund that can cover your deductible should anything happen.
Embrace telematics-based insurance
Telematics, or usage-based insurance, is an exciting developing technology that collects and uses your real driving data to determine your premium. That means insurance companies would
be able to lower rates for drivers that aren’t risky while punishing drivers who get into trouble more often. The technology is still in its infancy, but I imagine that when it’s more developed companies will set parameters that determine a driver score. If your data brings you above certain thresholds your auto insurance policy premiums will rise. If you stay within the company’s safe parameters long enough your premiums will drop, similar to Allberta’s Grid Levels.
Shop around
Insurance is a competitive industry. Companies go out of their way to offer superior prices, but there’s no single winner for best bang for your buck. The cool thing about the Internet is that, while in the past you would have to individually contact insurance companies or brokers to get quotes on insurance rates, you can now compare and choose the best rates for free and get a number of quotes.
Your best bet is to shop around for good rates every time your auto insurance policy is up for renewal. That way, you can feel confident that you are always getting the best deal.