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How to Save Money on Car Insurance in Canada

Car insurance in Canada is a legal requirement if you want to drive on Canadian roads. 

If you don’t have insurance, you could face fines, legal action, and even the loss of your driver’s license.

Without insurance, you would be responsible for paying for any damage to your car or someone else’s, as well as any medical bills or other costs associated with the accident.

Depending on the severity of the accident, these costs could be astronomical and could even bankrupt you.

However, car insurance can also be quite expensive, which is why it’s important to try and save money on your premiums where possible. 

Saving money on car insurance can help you to reduce your overall transportation costs and free up more money for other expenses. 

Car-Insurance
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Here are some tips on how to save money on car insurance in Canada:

1. Shop Around & Compare Rates

Insurance rates can vary significantly from one insurer to another.

By shopping around and comparing rates, you can ensure that you’re getting the best possible coverage at the most affordable price. 

There are various ways to compare rates, such as using online comparison platforms like LowestRates.ca and Rates.Ca or working with an insurance broker

It’s important to take into consideration factors such as deductibles, coverage limits, and any discounts that may be available.

By taking the time to research and compare quotes from multiple insurers, you can ensure that you’re getting the best possible coverage at the most affordable price.

2. Look For Discounts

Another effective way to save money on car insurance in Canada is to look for discounts.

Many insurance companies offer a variety of discounts that can help you lower your premiums. Some common discounts include:

  • Multi-vehicle discount
  • Multi-policy discount
  • Safe driving discount
  • Usage-based insurance
  • Loyalty discount

To find out which discounts are available to you, talk to your insurance company or broker. They can help you determine which discounts you’re eligible for and how much you can save. 

By taking advantage of discounts, you can lower your premiums without sacrificing coverage. 

3. Increase Your Deductibles

A deductible is the amount of money you agree to pay out of pocket before your insurance coverage kicks in. 

By increasing your deductibles, you’ll be taking on more financial risk in the event of an accident, but you’ll also be able to lower your insurance premiums.

When considering whether to increase your deductibles, it’s important to weigh the potential savings against the additional financial risk. 

If you’re a safe driver with a good track record and don’t expect to get into an accident anytime soon, increasing your deductibles could be a smart move.

However, if you’re a higher-risk driver or you’re not comfortable with the additional financial risk, you may want to stick with lower deductibles.

4. Maintain a Clean Driving Record

Your driving history is one of the most important factors that insurers consider when determining your premiums.

If you have a clean driving record, you’ll typically pay less for insurance than someone with a history of accidents or traffic violations.

By keeping a clean driving record, you demonstrate to insurers that you’re a safe driver and less likely to be involved in an accident. 

This can result in lower premiums, as insurers will view you as a lower risk to insure. 

5. Consider Telematics or Usage-Based Insurance

Telematics or usage-based insurance is a type of car insurance that uses technology to track your driving habits. 

This type of insurance can be a great way to save money on your premiums because it rewards safe drivers with lower rates.

With telematics or usage-based insurance, your insurer installs a small device in your car that tracks your driving habits, such as your speed, braking, acceleration, and the time of day you drive. 

Based on this information, your insurer can adjust your premiums to reflect your driving behaviour. If you’re a safe driver, you could see significant savings on your insurance premiums.

If you’re considering telematics or usage-based insurance, be sure to weigh the potential savings against your privacy concerns before making a decision.

6. Pay Your Premiums Annually

Paying your car insurance premiums annually instead of monthly can be a simple and effective way to save money on your car insurance in Canada. 

Many insurance companies offer a discount to customers who pay their premiums in full upfront. By doing this, you could potentially save a significant amount of money over a year.

The reason insurers offer this discount is that it reduces their administrative costs. When you pay monthly, they have to process your payment every month, which can be time-consuming and expensive. 

When you pay annually, they only have to process one payment, which is much more efficient.

7. Protect Against Theft

Protecting against theft is an important tip for saving money on car insurance in Canada. 

If your car is stolen, you will not only lose your vehicle but you may also have to pay for damages or replacement costs, which can be quite expensive. 

Therefore, installing an anti-theft device can help lower your insurance premiums.

Anti-theft devices, such as steering wheel locks, car alarms, and GPS tracking systems, can make it more difficult for thieves to steal your car. 

Besides, some insurance companies offer discounts for having anti-theft devices installed in your car, as they reduce the likelihood of theft and lower the risk for the insurer.

8. Improve Your Driving Skills

Several insurance companies offer discounts to drivers who have completed a defensive driving course or other driving-related training.

These courses can teach you how to drive more safely, avoid accidents, and reduce your risk of filing a claim.

In addition to potentially qualifying for a discount, improving your driving skills can also help you avoid accidents and keep your driving record clean. 

This, in turn, can help to keep your insurance premiums lower in the long run.

Defensive driving courses can be taken online or in-person, and usually take several hours to complete. 

Some insurance companies offer defensive driving courses, so be sure to check with your insurer to see if this is an option. 

9. Drive a Sensible Vehicle

Driving a sensible vehicle is another great way to save money on car insurance in Canada.

Insurers take into account the make and model of your car when calculating your premiums.

Generally, safer cars with lower repair costs will result in lower premiums. 

This means that if you drive a vehicle with a good safety rating, low theft rates, and good fuel economy, you may be able to save money on your insurance premiums.

In addition to potentially saving you money on insurance premiums, driving a sensible vehicle can also save you money on gas and maintenance costs over time.

10. Use Winter Tires

In many Canadian provinces, insurers offer discounts to drivers who use winter tires during the winter months. 

Winter tires provide better traction on snow and ice, which can help to reduce the likelihood of accidents during the winter season. 

This, in turn, can result in lower insurance premiums since drivers who use winter tires are considered to be less of a risk to insure.

In addition to the potential insurance savings, using winter tires can also help you to avoid costly accidents and repairs, which can save you money in the long run. 

11. Drive Less

Most insurance companies take into account how often you use your car and how many kilometres you typically drive each year when determining your premiums.

If you can reduce your annual mileage, you may be able to qualify for lower rates.

There are several ways to drive less and reduce your mileage. For example, you could try:

  • carpooling with coworkers or friends, 
  • taking public transportation, or 
  • walking or biking for short trips

If you have multiple cars, consider using the one with the lowest insurance premiums for shorter trips, and save the car with the higher premiums for longer trips. 

If you work in a hybrid setting, you should consider working from home more often, which would eliminate your daily commute.

12. Review Your Policy Regularly

As your circumstances change, your insurance needs may change as well, and your current policy may no longer be the best fit for you.

Thus, it’s essential to review your policy regularly to ensure you’re getting the best possible coverage at the best possible price.

For example, if you’ve recently moved to a safer neighbourhood or started driving less, you may be eligible for lower premiums. 

Similarly, if you’ve recently paid off your car loan, you may be able to drop collision coverage, which can significantly reduce your premiums.

In addition to reviewing your policy when your circumstances change, it’s a good idea to review it annually when it’s time to renew your coverage. 

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Final Thoughts

Car insurance is essential in Canada, both from a legal and financial perspective.

However, by taking steps to save money on your premiums, you can ensure that you’re getting the best possible coverage at the best possible price.

But remember, the cheapest policy may not always be the best policy for you. 

Be sure to consider both the cost and the coverage when choosing a car insurance policy.

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About John Adebisi

John Adebisi is a CPA, FCCA and MBA holder with a Bachelor's degree in Accounting & Finance. He has over a decade of experience in writing personal and business finance content for audiences across North America, Europe, the UK and Africa. In addition to his writing experience, he also has a strong background in financial research and analysis, giving him a unique perspective of the financial markets. John derives pleasure in helping people make smart financial decisions, and he believes that knowledge and experience can be valuable resources for anyone who wants to learn how to manage their money.

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