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What Are The Factors That Determine My Auto Insurance Rate?

Rachel Surman

Apr 26, 2018 5 min read

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What Are The Factors That Determine My Auto Insurance Rate? How To Find The Right Auto Insurance

This may not be the news you were hoping for – but your auto insurance rate will most likely increase come renewal time. Unfortunately, recent reports indicate that insurance rates are due to increase in 2018 in Ontario.

Both private and government-owned insurance companies are regulated by the federal and provincial governments. So although some insurance companies are private, the government still sets rate restrictions, mandatory minimum coverages and solvency laws. There also may be the chance that you could be paying less than you currently are for auto insurance. Lucky for you, Borrowell has teamed up with Sonnet Insurance for tips and tricks to help you find the right auto insurance!

Buy home and auto insurance online in 5 minutes. Get a quote now.

What are the factors that determine my auto insurance rate?

There are many factors that calculate your rate on auto insurance, such as:

  • The type of vehicle you drive

The car you drive is a big factor when it comes to your auto insurance rate. Every vehicle is rated on the likelihood of the car being in an accident or being stolen. Vehicles are also, not surprisingly, rated on how safe the car is. Vehicles with a higher safety rating are generally less likely to be involved in a serious accident, which means the insurance company is less likely to have to pay out a big injury claim.

Generally speaking, a safe car that is moderately priced should be able to get you a decent rate.

  • Where you live and where you drive your vehicle

This is another important factor. If you’re driving around in a busy city, then chances are you will have a higher car insurance premium than someone who is driving in a less-populated area. Considering the fact that most accidents happen close to the home, auto insurance issuers will take the busyness of your neighborhood into account.

They will look at data from your neighbourhood such as theft, accidents, and even look at whether your car will be parked in a garage or outside. Your commute is another factor that matters: cars that don’t go out on the road very often will have cheaper insurance than drivers with long commutes.

  • Your driving history

Of course, your driving record matters! If you’ve been in accidents in the past, have received numerous tickets, and have made previous auto insurance claims – your auto insurance rate may be a little higher for you compared to someone that has a clean driving record.

The good news? As time passes, the importance of these tickets lessens over time. So if you were a bit of a reckless driver in your younger years, hopefully, your auto insurance rates are decreasing.

4 Tips to find the right auto insurance

So, if you’re up for renewal, or buying auto insurance for the first time, we’ve got you covered. 

1. Determine the coverage you need before choosing a provider

Be sure to do your research to fully understand the auto insurance you need. There’s much more required than just shopping around for the lowest rate – but we’ll get into that a little later. You should determine the coverage you need before choosing your provider to be sure your bases are covered, but also so you’re not paying for more than what you need. There are many different types of coverage, but the main ones include:

  • Liability

Auto liability is a kind of insurance that is mandatory all across Canada. This insurance protects you from being sued or held legally liable for something that happened while operating a vehicle. This includes negligence, property damage to others/public property or injury.

  • Collision

If you’re looking to protect your vehicle physically, then collision insurance is the most important insurance for you. Collision, as you may have guessed, protects against damage by providing financial compensation in the event of an accident.

  • Comprehensive

Comprehensive insurance protects against damages done to your vehicle that may not have even happened while you were driving it. Comprehensive insurance usually protects against things like fire, vandalism, and fallen trees.

There are many types of insurance. It’s important to educate yourself and understand the essentials.  

2. Don’t just choose the cheapest option

It may be tempting to shop around only for the lowest rate. But when it comes to auto insurance, this really isn’t the best route (pun intended). No matter how you slice it, the cost of auto insurance is always relative to the services and coverages that you receive. Here are a few reasons why:

  • Insufficient coverage

Choosing the cheapest option may mean that you’ve only chosen the minimum coverage, which could leave you vulnerable in the event of an accident.

  • Expensive out of pocket costs

Again, choosing high deductibles to get lower premiums may leave you with higher out of pocket costs.

  • Inadequate customer service

When you buy the cheapest auto insurance available, you may end up paying for it in the lack of customer service. Be sure to choose an auto insurance provider that has 24-hour claims service so your insurance company is there when you need it.

3. Shop around and compare different insurance providers

Shopping around for the best insurance rate is a great way to ensure you’re getting the best deal – especially when your auto insurance is up for renewal. Many online insurance providers can give you a quote online instantly so you’re able to compare your options. With Sonnet, not only can you get a quote online, but you can actually buy auto insurance in under 5 minutes

Buy home and auto insurance online in 5 minutes. Get a quote now.

4. Check for discounts if you’re eligible

Some insurance providers will give you discounts on insurance if you’re above a certain age, are 5 years claims-free, or you’re married. Be sure to check and make sure you’re getting the discounts you’re eligible for.

Another way to get a discount on your auto insurance is to combine both your home and auto insurance policies. When you insure both your home and vehicle with the same insurance company, you’ll usually be given a multi-policy discount – saving, on average, 10-15%.

Armed with these tips, we hope finding the perfect auto insurance is a seamless experience. If you’re in the market for auto insurance, be sure to check out Sonnet Insuranceand all the ways you can save with home and auto insurance.

Buy home and auto insurance online in 5 minutes. Get a quote now.

Financial well-being and being well-insured often go hand-in-hand. That’s why Borrowell has teamed up with Sonnet to help Canadians save money and find the right auto insurance! Learn more about Sonnet.

Rachel Surman
Rachel Surman
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Rachel Surman is a digital writer at Questrade and a former content marketing specialist at Borrowell. Rachel is passionate about helping educate others about credit. She's also a big fan of budgeting and saving - mainly so she can visit all the places on her bucket list.

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