Car insurance quote Explained!

A car insurance quote provides an estimate of what you’ll be charged for car insurance, monthly and annually. You can get a quote from a broker, an agent, or an insurance comparison site.

Regardless of the route you take, you’ll be asked intake questions before you can see your quote. Your answers provide a general picture of your insurance needs.

Every car currently in use needs to have insurance – it’s illegal to operate one without it. Because of this, your auto insurance quote will automatically include the minimum coverage required to operate a car legally.

You’ll also have a chance to state whether you think you’ll need optional forms of insurance; this will be factored into the quote you get.

Here’s what you can expect to be asked during the quoting process:

• Your age
• Your gender
• The date you received your license
• Your car’s make, model, and year
• Where you park your car overnight
• Whether your car is leased
• The number of kilometres driven to work one-way
• Whether you would like your insurance to include comprehensive and collision coverage

Auto insurance policies are standardized. However, there’s still a wide variance in how much one company charges for coverage versus another one. It’s important to compare quotes from a variety of providers. With car insurance rates going up (and the cost of living in general), it’s more important than ever to find savings where you can.

Factors that impact your car insurance quotes

Whether you’re getting car insurance for the first time or looking to renew your current policy, many factors shape your car insurance premium, from car type to driving record.

Below are some factors that insurers use to determine your insurance premium.

Your vehicle type

Insurance companies have different rates for different car makes and models. The insurance company looks at a few things when determining your rate: the chances of your car being stolen or damaged in an accident, for example. Certain vehicles have a higher risk of being stolen than others. According to the Insurance Bureau of Canada, the vehicles that attract thieves most often are Ford pickup trucks and Toyota SUVs.

Insurance companies also consider how much it might cost to repair your car if you get into an accident. Generally, rates tend to be higher for newer cars, especially sporty models, but safety and driver-assisted features may help lower your premium.

If you’re curious about how your car measures up, find out which makes and models are the cheapest to insure.

Your age

Most drivers can expect to see their car insurance rates decrease for the first time when they reach the age of 25. Up until this point, young drivers, especially young male drivers, are considered high-risk due to the increased likelihood of getting into an accident and having to file a claim. As you build a safe driving record and insurance history, both may result in a cheaper car insurance premium over time.

As you get older, car insurance typically gets cheaper again when you hit 50 years old. By this age, you have an established driving record, insurance history, and are considered to be a lower risk.

But by the time you hit your mid-50s and onwards, your car insurance might increase. Find out how you can save some money with affordable seniors’ insurance.

Your gender and marital status

Insurance companies also consider your gender. That’s because males are statistically more likely to file an insurance claim, which means men pose a higher risk of getting into a car accident.

Your marital status may also factor into the equation. Married couples tend to get lower rates than single individuals. So, if you’re a young, single male, you may pay a higher rate than your married counterparts.

According to this Globe and Mail article, there are a few reasons why married couples get lower rates, including their age and driving experience. Also, many married couples have kids and tend to drive more responsibly.

With that said, each insurer determines their own rates, and some won’t factor in your marital status.

Where you live

Where you live can have a big impact on your car insurance rate. That’s because urban areas tend to have higher claims costs. Being in an area with more people means more risks, accidents, and thefts. When those things occur, claim costs rise, and so do premiums.

Along with urban areas having higher claims costs, your postal code also affects your premium. Each postal code is associated with a neighbourhood, and some neighbourhoods are at a higher risk for theft or accidents.

Driving record

The cost of your insurance largely depends on your personal driving record. Previous accidents, how long you’ve been licensed, whether or not you’ve taken a driver training course, speeding tickets, and serious convictions such as impaired and distracted driving are all part of your record.

The more traffic convictions and collisions you have, your insurance premium will likely be higher.

The length of time traffic convictions stays on your driving record varies. For example:

• A speeding ticket stays on your record for three years.
• Demerit points stay on your licence for two years. The number of points added to your record depends on the offence. In Ontario, if you accumulate more than 15 demerit points, your licence will be suspended for 30 days.

Car accidents are a bit trickier to determine, and the primary factor is finding out who is at fault. Your insurer will use provincial Fault Determination Rules to determine who caused the accident. If you’re found at-fault – partially or fully – your premium may increase, and the collision will stay on your driving record for six years.

Insurance company

Shopping around for the best deal can be time-consuming and overwhelming, as each insurance company offers different rates based on your profile. To simplify and expedite your search for affordable car insurance, get a free quote from a broad range of insurers.

After you’ve found a few insurance rates you’re interested in, you can start comparing the policies line by line to see what is offered and what isn’t. Keep in mind that cheap doesn’t always mean the best.

To truly get the cheapest and best car insurance, you should shop around whether your policy is up for renewal or not because each company offers different rates.

Insurance coverage

Depending on what type of car you have, you may want to get different coverage. For example, you should consider a depreciation waiver on a brand-new car. If your car is severely damaged in an accident, this coverage allows drivers to receive a claim on the value of their car. Of course, there are caveats to this: the car must be brand new (not used), the waiver can last between one and three years, and your claim will be settled in one of three ways (whichever is lower):

• The amount you paid for the vehicle.
• The manufacturer’s list price for the vehicle, with similar options and equipment on the original date of purchase.
• The cost to replace the vehicle with a new one with similar options and equipment

Insurance policy deductible

The deductible is the amount of money you would pay before insurance starts to cover you in the event of an accident, theft or other damage to your vehicle. Depending on the policy, the deductible amount can vary but typically starts at a few hundred dollars and goes up.

It may sound counterintuitive to want to increase your deductible, but a higher deductible means a lower premium.

Ask about discounts

The best way to save even more is to ask your provider about discounts they offer and what you may qualify for.

Here are a few easy ways to potentially save:

• Sign up for a usage-based insurance (UBI) program. A UBI program monitors your driving behaviour and habits. A mobile app and a telematics device installed in your vehicle tracks how fast you drive, how hard you brake, and the distance you drive. Consistently demonstrating safe driving behaviours can help you save money by earning a discount on your premium.
• Get winter tires. Many insurers offer a winter tire discount of up to 5% on your premium when you install winter tires.
• Invest in driver education. Young or new drivers can also give you a discount if they’re on your insurance policy if they enrol in an accredited driver’s training school and complete the training. The money you’ll save on insurance typically offsets the cost of the training within the first year.

Review your policy annually

Reviewing your policy annually ensures you’re still getting the best rate, especially if your insurance needs change throughout the year.

After careful review, you can decide to renew the same policy, make changes to your policy, or switch insurers to get the coverage you need at an affordable price.

Whatever you decide, it’s good to review and shop around annually.