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What is Car Insurance?
In order to operate a vehicle in Canada, you need to have a valid car insurance policy in place at all times. Car insurance policy requirements vary from province to province, depending on the type of insurance system each is mandated by (public vs. private). However, you need to have a minimum amount of third-party liability insurance, to protect yourself financially in the event that you injure someone or damage their car/property. You’ll also need a minimum amount of accident benefits, which provides coverage for any medical/rehabilitation costs that resulted from an accident. You can also decide to buy more than the minimum amount required, as well as purchase additional coverage (such as comprehensive insurance) on top of your basic car insurance policy.
Why Compare Car Insurance Rates?
You might think that car insurance quotes for the same driver/car would be similar across all providers, but every car insurance company has its own costs to cover, based on data about all of their existing users/claims. Broken down, every car insurance company has a number of “risk groups” it divides people into, and they charge premiums based on the claims experience of each group. When an insurance company gathers information about you, their system places you into one of those groups – and a portion of your quote is based on the group you’re in. You can’t see what goes on behind the scenes, but the group you’re placed into and the premium that follows could vary greatly from company-to-company, which is why it’s wise to compare car insurance rates and see who can offer you the cheapest insurance.
How Car Insurance Rates are Calculated
Dozens of factors contribute to the total cost of your car insurance premium, all of which can be divided into four categories:
Your driving profile
Your car insurance provider
Based on the information you provide for your driving profile, the car insurance company will place you into one of its risk groups, which outlines the majority of the costs in the other points. You can read more about how car insurance rates are calculated on our site.
How to Save on Car Insurance
Car insurance rates vary from province-to-province, city-to-city and provider-to-provider. There are some costs you can’t control, such as the base rates determined by the public car insurance systems in British Columbia, Manitoba and Saskatchewan. However, there are a number of ways you can save money on your car insurance, including:
Maintaining a safe driving record
Increasing your deductible
Making all payments on
Asking for discounts
You can read about these tips and find more ways to save on car insurance on our site.
How to Buy Car Insurance
When you’re ready to buy a new car insurance policy, you can do so in person or over the phone, at a bank/credit union, insurance company or insurance brokerage. If you haven’t already done so, we always suggest you start by comparing car insurance rates online. We shop the most competitive providers to bring you a list of the best car insurance rates in Canada. Even if you don’t use one of the providers on our site, you should at least do this as part of your research, to make sure you know what’s available to you. Once you’ve picked and purchased the best car insurance coverage for you, the insurance company is responsible for providing you with a certificate of insurance to keep in your vehicle. The certificate lists details about the vehicle that’s insured, the coverage you have on it and the period of time which you are covered.
Here at RateSupermaket.ca, we keep you in the loop of different ways to save, whether it be on your mortgage, through investments, or on your car insurance. The Financial Services Commission of Ontario (FSCO) has reported that Ontario car insurance rates have increased by 2.23 per cent on average.
Car insurance rates fluctuate based on a number of different factors. However, before an insurance company can change rates, it must first be approved by the Financial Services Commission of Ontario (a regulatory agency of the Ministry of Finance).
FSCO publishes approved rate changes quarterly, and the latest results are in:
In the first quarter of 2018, approved rates from auto insurance companies increased by 2.23 per cent on average – not a huge increase, but notable.
The range of approved rates seemed to be significant, with some companies lowering their rates by about one per cent, and another inflating its rates by 9.96 per cent on average.
“Consumers are urged to shop around for auto insurance,” FSCO said in its quarterly statement. “Rates for the same coverage vary based on each insurer’s claims experience and the insurer’s rating system.”
In comparison, the fourth quarter of 2017 saw an average decrease of 1.03 per cent.
Why are car insurance rates changing?
In its statement, FSCO noted two factors that could be attributed to rising rates in Ontario.
First, insurance companies are reporting an increase in claims costs related to property damage. This is likely due to increases in vehicle repairs costs as cars become more technologically advanced.
Second, the growing number of distracted driving incidents may be driving up the overall cost of direct compensation and collision claims insurance companies need to process.
Essentially, insurance companies may be paying out more in claims and need to compensate by raising rates.
How do I know if my car insurance rate changed?
With rates changing so often, it can be hard to tell if your company is still giving you the best rate. The same rate you were offered last year may not apply when you choose to renew.
Thankfully, RateSupermarket.ca allows you to easily compare auto insurance quotes with their online comparison tool. Within minutes, you can see who offers the best coverage for the lowest price. It’s fast, easy and free.
Don’t be afraid to switch insurers. Shopping around on RateSupermarket.ca could save you hundreds on your car insurance.
This post is updated quarterly to reflect latest FSCO results.
Car Insurance 101 / Economic News / Insurance / Lifestyle News / RSM News
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