Are you stuck with a car insurance bill that’s draining your bank account every month? While insurance is a necessary expense if you’re a driver, coming up with the cash to pay for it shouldn’t cause you stress. Here are five reasons you’re paying too much for car insurance – and what you can do to fix them.
- You’re automatically renewing your policy every year. Whether it’s because you’re happy with your current coverage, or you just assume all insurance providers are equal, you’re automatically renewing your policy each year without researching other options – and it could be costing you money. Insurance providers offer different prices and plans, even for the same car and driver, so comparing insurance quotes before choosing a provider is an important way to secure the best price. In addition, insurers change their rates regularly, so it’s important to do your research each year before renewing your policy, just in case a better option is available.
- You’re not taking advantage of discounts. If you haven’t talked to your insurance provider about discounts recently, it’s time to pick up the phone. There could be many discounts you don’t know about, or that your insurer isn’t aware that you qualify for. For example, if you haven’t told your insurer that you recently retired, they won’t know that you’re clocking less kilometres on your car – and potentially eligible for a lower premium. Or, you might not know that you could earn a discount by paying your premium in one lump sum – an option that could save you up to 9 percent.
- You have a poor driving record. Your bad behaviour on the road will have consequences beyond being a traffic stop. For example, just one speeding ticket could increase your premium, and a few could more than double your rate. The best way to maintain your driving record is to obey the rules of the road, but what can you do if you already have multiple tickets on your record? You can start by changing your habits to prevent future tickets – more tickets will increase your premium and can eventually label you as a high-risk driver. Shopping around can also help you find a better price for your insurance, even with a spotty record. Finally, tickets only appear on your record if you’re found guilty of an offence, so successfully challenging tickets in court could save your insurance rate.
- You live somewhere with high rates of insurance fraud. The Insurance Bureau of Canada estimates that insurance fraud costs the average Ontario driver an extra $236 each year. In fact, rates of fraud are so high in Ontario that drivers are paying some of the highest premiums in the country, despite the fact that the province also has the lowest rates of accidents and fatalities. Other than reporting suspected fraud to your insurer, there’s not much you can do to combat this expensive problem. Instead, look for other ways to lower your premium to offset the cost.
- You have too much coverage. Did you know that not all types of car insurance coverage are legally required? For example, you don’t necessarily need collision coverage on your vehicle. Collision coverage helps cover the cost of vehicle repairs, towing, and potentially replacement – even if an accident was your fault. So, why wouldn’t you want collision coverage? If your car is very old, the amount you’re paying for collision coverage and the amount you’d pay as your deductible if you were to make a claim could cost more than the value of replacing your entire car.
If you think you’re paying too much for car insurance, it’s time to review your policy and consider other options, whether it’s finding a new provider, changing your level of coverage, or asking for discounts to your premium.