Choosing The Best Car Insurance Company

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Article Contents
By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on July 18, 2023

Visit author page
By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated July 18, 2023

Visit author page

5 minute read

Article Contents
cars

Buying a new car is an important milestone in your life. As an auto-insurance is mandatory for your car-funded freedoms, it is essential to look across several factors to find the best car insurance for you. 

What should you look for when choosing your car insurance company? Why should you spend some time choosing which company you purchase a car insurance policy from? Getting the best rate is important, but that is not the only thing that matters. Other features such as customer service, is the company easy to deal with if you need to file a claim, does the company offer any kind of accident forgiveness for safe drivers, do they have a reputation for dropping drivers, etc. are equally important.

Why do you need auto-insurance?

You are required to have auto insurance if you’re a driver in Canada. Without this, you can face a major fine. In Ontario, getting caught driving without an auto-insurance can cost you between $5,000 and $50,000 for a single offense, a suspended driver’s licence and your car impounded.

Further, you will also be considered a high-risk driver, and face higher auto insurance premiums in the future. You might also be refused auto insurance coverage. If you are involved in a collision and found at fault for an accident causing injury or death, you would personally be responsible for medical expenses, vehicle damage repairs or any other costs.

What factors should you consider when insurance shopping?

Factors that Affect Insurance

To find the ideal auto insurance company for you and your needs, you should consider these factors:

Budget and Discounts

This factor takes precedence as you should choose an auto insurance policy you can sustain.

There is little rationale in choosing the heaviest insurance policy with all kinds of coverage and then struggling to meet the premiums. Also, consider how much deductible or out-of-pocket expenses can you afford. If this is a larger number, you can save on your premiums.

Car insurance is a big cost but is not the only expense in your life. It will serve you well in shopping around for different kinds of discounts which suit your needs. Some providers may offer an army and military discount, some might have a discount for additional vehicles, bundle coverages etc. It will not only save you money to look around for an offer applicable to you but also ensure the right kind and amount of coverage.

Coverage

Your coverage depends on your level of risk.

In some provinces such as Alberta, insurance coverages must contain certain features. While looking at insurance policies, it is important to note the features which apply and don’t apply to you.

For instance, some insurers may offer hail coverage if you are ascertained to live in a hail prone zone while some might not. It is important to either get or reduce the coverage depending on the statistical history of your region and whether you drive through areas prone to this risk. If in doubt, research your neighbourhood, your driving habits, and your frequent driving routes.

Your age and experience also play into this as you will need to get more coverage and pay more for it if you’re under 25. Ultimately, it is better to have a little more coverage than less.

Information Security

Car insurance companies collect some information like your age, marital status, contact information, identification numbers, employment history, financial information, education, and gender.

However, insurers in Canada generally do not share this information with other companies or third parties. They also typically do not divulge this information or information about claims to other insurance companies, except in cases where multiple people from different insurance companies were at-fault for an accident and the companies need to divide the charges. There exists a common data bank, however, for information regarding accidents that all companies have access to.

Choosing an insurance company with a strong reputation and trustworthy history may minimise this even further.

Services

You should look into how the after-sales service of an insurer. In case of an accident, you need your insurance agents to be prompt in receiving your case and filing your claims. It is important to resolve claims quickly to gain access fully insured access of your car again.

See if your insurer provides any other features such as roadside assistance which may prove useful in the future. This feature is usually an add-on so make sure you look around for the best rates and features.

Reputation

An insurance company that has a strong history of supporting its customers through their claims, payments, and non-claim problems is a safer choice for your insurance policy.

Reputation plays a role in getting your delivery fast and at no hidden costs. While it is not always important for a company to be old to be a good insurance provider, looking at a company’s history definitely helps.

Another major red flag to look out for is if the company has a history of dropping customers, especially after a major claim. Doing your research on companies goes a long way in ensuring you find the best auto insurance company for you.

 What factors affect your costs?

Car insurance in Ontario is not cheap. An insurance provider may look at the following before determining your costs:

Driving Record

Your driving history becomes one of the most influential factors when determining the cost of your auto insurance.

A clean driving record helps you save money on your insurance policy. This means you have avoided traffic violations and accidents or any other smaller traffic infractions from getting your cost to unnecessarily increase. Even if your driving history has some past accidents or traffic violation records, their impact on your insurance tends to decrease over time as long as your further driving keeps clean.

Purpose & Frequency

Driving for leisure versus driving for business or commercial purposes also impacts your insurance rates. The former may cost you less than if you use your car for work. Further, long hours of daily commute will face a higher insurance rate than an occasional or a weekend driver.

Vehicle Type

Depending on the make and model of your car, you can save or spend more than the average. This price range can differ by more than $500.

Some types of vehicles such as hybrid vehicles may also enjoy a discount from some insurers. Installing an anti-theft feature or to your car may also help you save on your insurance premiums.

Car Age

The age of your vehicle is also a concern for your insurance rate. A person driving the same vehicle for five years may enjoy a lower rate than someone having driven the same car for less than a month.

However, an old car’s insurance can also be heavier than a new car, especially if that car is a restored classic or expensive and tedious to repair. Ultimately, driving a car that is safe, affordable and inexpensive to repair can save you money on insurance in the long run.

Your Age

Young drivers are statistically more likely to be in an accident. Therefore, your insurance rates tend to be higher in the age bracket of 18-25 and start decreasing once your cross that threshold.

Gender & Marital Status

Both of these factors are based on assessing the perceived responsibility and accident-prone behaviour.

As men are statistically more likely to drive more and to engage in dangerous behaviour such as speeding, they may face a higher insurance premium. The factor of marital status may vary depending on the insurance providers. Generally, marriage brings a greater sense of responsibility and may decrease insurance premiums.

Location

Insurance providers assess your risk based on the neighbourhood you live in.

Insurance providers account for various factors such as the prevalence of theft, claim histories, high traffic density and the frequency of collisions to calculate your insurance rate. Two neighbourhoods in the same city may have completely different insurance risks.

Ontario is one of the most expensive provinces for car insurance. While this also differs by cities within Ontario, Toronto tends to be among the most expensive. However, to find the cheapest car insurance in Toronto, head over to the free insurance quote tool on our website.

Sometimes, even after all considerations, you find a better policy right after you choose your meticulously researched policy. Or your life situation changed. In these cases, you may want to look into changing your insurance mid-policy.

Congratulations! You made it to the end!

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