Many drivers financially impacted by the COVID-19 pandemic will be looking for more ways to cut costs. One surefire way to do this is to decrease what you’re spending on auto insurance.
Insurers consider several factors when determining how much you'll pay for premiums, such as your age, your gender, where you live, your license level, your car, your claim history, and the type of coverage you choose.
Even your driving record impacts your rate. Therefore, one of the surefire ways to get lower rates is to drive responsibly. Typically, the fewer infractions and fines, the cheaper the insurance.
With that in mind, here are three of the best ways to lower your auto insurance premiums.
Remove Optional Coverage
When it comes to car insurance, some forms of coverage are mandatory and some are optional.
Because driving behaviour has changed since the pandemic began, it’s advisable to look into what coverage you no longer need during this time. For example, if you’re working from home now indefinitely or taking public transport more often you can just have the basic level of insurance that drivers are obligated to have.
Under normal circumstances, it’s still wise to avoid extra frills in your policy and pay only for the coverage you need in order to save money. A good example is if you’re driving an older car: you might want to consider dropping collision coverage. This type of coverage is only mandatory if you lease or finance a vehicle and if the vehicle isn’t worth much anymore, it might not make sense to pay hundreds of dollars extra a year just to get a small payout for your old vehicle. (E.g., if your car is assessed to have a value of $500, you might not want to pay that much a year for collision coverage, especially since you’ll likely have a $500 deductible, to begin with).
Keep in mind that if you don’t carry additional coverage, you might have to pay damages out of pocket.
Ask for Additional Discounts
Since fewer Canadians are driving due to lockdown measures to help curb the spread of coronavirus, the auto insurance industry will be offering drivers rebates and discounts on car insurance bills in the coming weeks and months.
Discounts like this aren’t always automatic, so it’s best for you to inquire.
Other options to secure a discounted rate include:
Bundling your home, life or other types of insurance policy to your car insurance plan
Installing safety features like winter tires and alarm systems
Student or retiree discounts
Enrolling in defensive driving courses
Loyalty discounts for long-term customers
Agreeing to use telematics, also known as usage-based insurance. This will require you to use an app or plug-in into their vehicle to track your mileage and driving habits.
As well, if you’re driving less, you should call your insurer and tell them. Auto insurance companies price your premium based on how much you drive every year. Driving less often leads to lower rates.
However, keep in mind that lying to your insurer about how much you drive can get you into big trouble. If you get into an accident, your company will send a claims adjuster to check your car. If they see your odometer is way out of whack with how much driving you reported, they may deny your claim entirely.
Premiums will vary from one insurance provider to another. It’s impossible to know which insurer can offer you the cheapest premium without comparing prices. So before deciding on one, it’s imperative to compare car insurance quotes. Use an online comparison tool to get several quotes from different insurers and brokers to make sure you're getting the lowest insurance premiums possible.
The Bottom Line
Remember, it’s not illegal to break up with your insurance provider at any time, it just may come at a cost if it’s before the expiry date of your contract. Changing your auto insurance premium can be an effective way to reduce your monthly expenses, just be aware of the potential costs and benefits of adjustments, and as restrictions loosen don’t forget to adjust things back if your driving behaviour changes.