Despite the perception that car insurance is just another financial burden, like taxes or utilities, you’ll soon realize why it’s such an important investment. Just like when you hedge in the investment world to protect against the risk of a loss on the financial market, car insurance is the same—it’s transferring the risk of a loss to a third party, so you can drive without worrying about the financial consequences of a crash.
However, just like the financial market, you have to do your due diligence in finding the right coverage for the best rate. Different insurance companies have different risk pools and financial structures, so rates often vary by thousands of dollars. There are a few different ways to make sure you’re fully protected, for the best price.
Shop for the Best Rate
By far the most important step in saving on car insurance is shopping around for the best rate. As mentioned above, different insurance companies’ prices differ by hundreds, even thousands of dollars, for what seems like no reason at all. However, it comes down to the different risk pools each company has on its books. For example, if one company has experienced more claims in the past year than another company, the company with more claims is likely to charge more in order to offset the losses from these claims. For the consumer, unfortunately it means you’re paying for other people’s claims, but it’s the way these companies manage risk.
Shop for a Safe Vehicle
It’s a no-brainer: newer cars also have newer safety features. As the crash testers continue to provide more comprehensive crash test ratings, the car companies have no choice but to keep up. New tests have forced manufacturers to increase the strength of the chassis, as well as introduce new technological safety features like forward collision warnings and automatic braking to avoid collisions.
Insurance companies like safer cars—personal injury lawsuits can cost millions of dollars. A smaller chance of injury means a smaller chance of a big litigation claim. If you can’t afford to shop new, at least shop safe!
Shop for the Right Coverage
Another crucial step in saving money on your car insurance policy is making sure you’re shopping for the correct level of coverage for your particular vehicle. For example, collision coverage might not always be necessary if you’re driving a beater. Also, you might not need certain endorsements (like loss of use if you have enough vehicles to cover you in the event of a claim) that will increase your rate.
Furthermore, the collision and comprehensive coverage deductibles can change your rate, so compare the differences in price as a result of moving these numbers around.
Shop for Discounts
There is a wide variety of discounts available that will help you save, such as the winter tire discount, good student discount, telematics discount, alumni discount, just to name a few. Be sure to ask your insurance broker about any discounts you might have missed!
Shop for Home and Auto
This is one of the biggest and quickest discounts available when it comes to insurance. A simple bundling of your vehicle and home can save you ten to 15 per cent on your policy, so don’t forget to bundle!
Whatever vehicle you choose, we provide instant insurance quotes, so you can compare prices of different vehicles at your leisure. Shop now!