What to Consider When Shopping for Auto Insurance

Canada requires every car owner to have auto insurance. Your policy should cover the owner, the vehicle, and the passengers. In the event of a collision, your insurance should also be able to cover the medical expenses of pedestrians you’ve injured and the property damage you caused.

Some provinces, like Quebec, offer insurance that covers the policyholder’s medical bills if they get hurt in a car accident.

For vehicle damage and liability, however, you need the help of a private insurer. The minimum liability insurance coverage is 200,000 CAD. This insurance is valid in Canada and the United States.

Insurance should never be an afterthought. It acts as a cushion for your medical and liability expenses in the event of a collision. However, some people may find it overwhelming to pay for insurance on top of their car loan fees.

Don’t be blindsided by the extra fees you may encounter in your car insurance premium. Here are factors you need to consider when shopping for car insurance.

The Type of Car You Drive

Insurance agencies have extensive data on vehicle types and models. They know which ones will most likely cost them claims. They adjust the insurance premium accordingly. Your insurance premium is what you pay periodically for coverage.

Flashy and popular sports cars with powerful engines are more likely to be stolen than entry-level sedans.  So, the premium on them is higher. Some insurance companies may even deny your auto insurance if your car is too expensive or rare. They may see it as too risky to insure.

How You Use Your Car

If you use your car for personal purposes, you’re covered by standard auto insurance policies. If you plan on using your car for business, like ridesharing or delivering goods, you need to add a commercial insurance policy to it.

Companies may also investigate your driving history. If you have had many moving violations and other driving-related offences in Ontario, the agency might deny your application. At this point, it’s better to find a broker that can provide car insurance for high-risk drivers.

Where You Live

The location of your home and job can also affect your insurance fees. Just as insurance companies have done intensive research on different car types and models, they have also studied different locations and their effects on the claims they receive. A common factor that they look at is the crime rate. The higher the crime rate in an area, the more likely your car could get damaged or stolen. As such, they may bump up the insurance premium.

Who’s Going to Use Your Car

Generally, your insurance follows your car, not you. Whoever is driving your vehicle may be covered by your policy if they get into an accident while driving. Some policies may require you to list the people who use your car regularly so they will be covered.

How Much You Drive

How much you drive may also affect your insurance fees. If you frequently use your car to get to work, a policy with a monthly fee may be best for you. However, if you don’t use it as much or you’re wealthy enough to have a rotation of cars you use, get a policy with a pay-as-you-drive plan. This way, you only pay insurance for the actual miles you drive.

The Deductible

A deductible is money you pay before your policy activates. Its main function is to share the risk between you and your insurer. The larger the deductible, the lower you must pay for your premium. If you have the extra money upfront, you might as well increase your deductible payment. You will save on your monthly fees this way you.

Car insurance is more than just a requirement for your vehicle purchase. It protects you from the financial consequences of possible vehicle accidents. Don’t let yourself be surprised by the fees that make up your premium. Familiarize yourself with these factors to get the best out of your policy.

Work with a Professional Insurance Broker

If you’re still worried that you might not get the best policy for your needs, work with a professional insurance broker like Youngs Insurance Burlington. Our agents are trained and experienced in working with insurance companies to create the best policies for you. We handle personal, home, auto, and other types of insurance. Email us today to get a free quote.

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