A large number of people hate purchasing auto insurance. For this reason, they hurry through it, spending as little time as possible. You can pay for these small mistakes big time in the future.
It pays to slow down, and review the details. Take the time to ask your insurance broker questions that may influence the type of coverages you buy and the amounts you purchase. The information you discover may even prompt you to switch to another auto insurer. Below, we'll provide five details you should uncover whenever you shop for coverage or renew your policy.
#1 - Which Car Insurance Coverages Do You Need?
Some coverages are mandatory in nearly every province and territory (though the required minimums vary). This is the case with Accident Benefits, third-party liability, and uninsured/underinsured motorist coverages. Other coverages are optional. While they are valuable to have in certain circumstances, they eventually cost more than they're worth. You can drop them, and lower your auto insurance rates.
For example, consider collision and comprehensive coverages. The former covers damage that results from an accident. The latter covers damage from non-accident events, such as a tree that falls on your vehicle. If you drive a new $80,000 BMW 7-Series, carrying collision and comprehensive is a good idea. On the other hand, if you drive a 1997 Toyota Corolla with a market value under $2,500, these coverages may be too expensive.
When do you draw the line on collision and comprehensive? As a general rule, do so when their combined annual cost exceeds 10 percent of your vehicle's value.
#2 - Are You Driving A "Risky" Vehicle?
Auto insurers in Canada refer to the Canadian Loss Experience Automobile Rating (CLEAR) system when calculating their policyholders' rates. This is a score that reflects the likelihood your car (based on its make, model, and year) will be part of a claim. It also reflects how costly that claim is likely to be. The CLEAR ratings are based on historical data that has been compiled for years.
It's worth finding out whether a potential auto insurer considers your vehicle to be "risky." If it does, your rates will likely be higher than otherwise.
#3 - Discounts For Which You Qualify
Nearly every car insurance company extends discounts to their policyholders. Unfortunately, most policyholders neglect to find out whether they are eligible for them. Examples include discounts for being a good driver, having an alarm system installed in your vehicle, and consolidating your auto and property insurance lines with the same company. These and other standards can reduce your premiums.
A "good driver" discount may be automatically added to your policy (though, don't assume so). This is because your insurer has access to the information it needs to make this decision. Other discounts will remain unclaimed until you investigate.
#4 - Type Of Replacement Auto Parts Used
Suppose you are involved in an accident during which your car's alternator sustains damage. It needs to be replaced. Some auto insurance companies will pay for original equipment manufacturer (OEM) parts. These are made by the automaker according to their own specifications. Other insurers will only cover the cost of rebuilt parts, the quality of which may range from good to bad. A poorly-rebuilt alternator might leave you stranded in the future.
Ask your insurer or insurance broker to clarify which type of replacement parts are covered. Keep in mind, OEM parts generally offer higher quality, but cost more. This will likely be reflected in your premiums.
#5 - Are Lower Rates Available Elsewhere?
Never assume your auto insurance company offers the lowest rates. In many cases, competing companies will be able to match your insurer's quote while offering more extensive coverages. Or, they'll be able to provide a lower quote altogether. Most consumers simply renew their policies without taking the time to look for lower premiums. Consequently, they pay more than necessary.
If you're changing your insurance company or you're switching around your plan, be sure to look at different rates from a few companies. By comparing you may just find a lower premium somewhere else. Few people relish the process of purchasing car insurance. However in the long run of things, you might be able to save quite a bit of money by just looking at the small facts.
It pays to slow down, and review the details. Take the time to ask your insurance broker questions that may influence the type of coverages you buy and the amounts you purchase. The information you discover may even prompt you to switch to another auto insurer. Below, we'll provide five details you should uncover whenever you shop for coverage or renew your policy.
#1 - Which Car Insurance Coverages Do You Need?
Some coverages are mandatory in nearly every province and territory (though the required minimums vary). This is the case with Accident Benefits, third-party liability, and uninsured/underinsured motorist coverages. Other coverages are optional. While they are valuable to have in certain circumstances, they eventually cost more than they're worth. You can drop them, and lower your auto insurance rates.
For example, consider collision and comprehensive coverages. The former covers damage that results from an accident. The latter covers damage from non-accident events, such as a tree that falls on your vehicle. If you drive a new $80,000 BMW 7-Series, carrying collision and comprehensive is a good idea. On the other hand, if you drive a 1997 Toyota Corolla with a market value under $2,500, these coverages may be too expensive.
When do you draw the line on collision and comprehensive? As a general rule, do so when their combined annual cost exceeds 10 percent of your vehicle's value.
#2 - Are You Driving A "Risky" Vehicle?
Auto insurers in Canada refer to the Canadian Loss Experience Automobile Rating (CLEAR) system when calculating their policyholders' rates. This is a score that reflects the likelihood your car (based on its make, model, and year) will be part of a claim. It also reflects how costly that claim is likely to be. The CLEAR ratings are based on historical data that has been compiled for years.
It's worth finding out whether a potential auto insurer considers your vehicle to be "risky." If it does, your rates will likely be higher than otherwise.
#3 - Discounts For Which You Qualify
Nearly every car insurance company extends discounts to their policyholders. Unfortunately, most policyholders neglect to find out whether they are eligible for them. Examples include discounts for being a good driver, having an alarm system installed in your vehicle, and consolidating your auto and property insurance lines with the same company. These and other standards can reduce your premiums.
A "good driver" discount may be automatically added to your policy (though, don't assume so). This is because your insurer has access to the information it needs to make this decision. Other discounts will remain unclaimed until you investigate.
#4 - Type Of Replacement Auto Parts Used
Suppose you are involved in an accident during which your car's alternator sustains damage. It needs to be replaced. Some auto insurance companies will pay for original equipment manufacturer (OEM) parts. These are made by the automaker according to their own specifications. Other insurers will only cover the cost of rebuilt parts, the quality of which may range from good to bad. A poorly-rebuilt alternator might leave you stranded in the future.
Ask your insurer or insurance broker to clarify which type of replacement parts are covered. Keep in mind, OEM parts generally offer higher quality, but cost more. This will likely be reflected in your premiums.
#5 - Are Lower Rates Available Elsewhere?
Never assume your auto insurance company offers the lowest rates. In many cases, competing companies will be able to match your insurer's quote while offering more extensive coverages. Or, they'll be able to provide a lower quote altogether. Most consumers simply renew their policies without taking the time to look for lower premiums. Consequently, they pay more than necessary.
If you're changing your insurance company or you're switching around your plan, be sure to look at different rates from a few companies. By comparing you may just find a lower premium somewhere else. Few people relish the process of purchasing car insurance. However in the long run of things, you might be able to save quite a bit of money by just looking at the small facts.
About the Author:
Getting good rates from an auto insurance agent has become more possible in the recent few years. If you're curious about public liability insurance packages available, it's worth checking out an agent.
