Getting an accurate car insurance quote requires more than just a few basic details. In fact, many insurance companies now use upwards of 30 different factors to determine pricing for your car insurance. Although each one plays a role in how much you end up paying, there are a few that clearly stand out as the “most important things”.
Here’s our list of the top 5 factors that have the biggest impact on how much you pay for car insurance:
No, the colour of your car does not matter.
However, there are details about your car that will impact your price. Insurance companies assess and rate every vehicle using historical claims data. They look at the likelihood of a vehicle being involved in a claim, and how much that claim will cost. Using this data, every model of car and light truck is grouped according to its expected claims frequency, claims cost, and theft rate. A lower risk equals a lower premium, and vice versa.
Basically, cars that have a high safety rating, are stolen less frequently, and are cheaper to repair, will have a better overall vehicle rating and consequently, lower premiums.
Although the list changes every year, some of the cheapest 2018 model year cars to insure in Canada include Hyundai Accent, Toyota Camry, and Chevrolet Cruze.
Where you live
Similar to vehicle ratings, insurance companies evaluate every postal code in Ontario to come up with territory ratings. Each location is scored based on the frequency and severity of car insurance claims in the area. Larger cities typically have higher car insurance rates because there are more drivers on the road, and hence, more accidents, and higher claims costs. This is why drivers in cities like Toronto, Mississauga, or Ottawa tend to pay higher premiums than those in smaller communities.
So, what are the most expensive cities in Ontario for car insurance? Although many places in the GTA are well above the provincial minimum, the top five most expensive cities in 2017 were Brampton, Vaughan, Mississauga, Markham, and Toronto.
Age and Gender
This one is a bit controversial. While many argue it’s unfair, age and gender are both used to calculate car insurance premiums in Ontario. Recently, there has been a push to end the age and gender based discrimination that exists in the auto insurance industry, but so far nothing has changed. The data shows younger drivers commit more driving infractions and are involved in more accidents. This is especially true for male drivers. While this may not be accurate for every driver, it does make young male drivers inherently more risky than their female counterparts.
In fact, car accidents are the leading cause of death for young people between the ages of 15 and 19, accounting for one-third of all deaths in this age group.
Although experience is often related to a driver’s age, there are situations when older drivers may have limited driving experience. This is why insurance companies use both age and experience to help determine car insurance rates. Let’s face it. Driving is a skill. So, the more you practice, the better you’ll become. Drivers with limited experience, especially young drivers, are more likely to be involved in a collision.
Actually, young Canadians ages 16 to 19 are over-represented in crash statistics. Although they represent only 13% of the drivers on the road, they account for approximately 20% of accident related deaths and injuries.
Tickets and Accidents
Out of all the factors, this is arguably the most important. But, the good news is, it’s also the thing you have the most control over. In reality, nothing helps an insurance company predict future accidents and claims better than a person’s driving record. The truth is, if you have multiple tickets and at-fault accidents, you become a higher risk to the insurance company. Statistics clearly illustrate that drivers who have tickets and accidents are more likely to have future claims and convictions. In this case, the driver’s past behavior is a good indicator of future behavior. So, if you want to get the best car insurance rates, you need to slow down, and drive safe.
In Canada, 27% of fatalities, and 19% of serious injuries resulting from car accidents involve speeding.
In all, insurance companies are focusing more on individualized rating for car insurance premiums. They are searching for any minor details that will help them generate a more accurate price for each risk. Although there may be several factors that influence how much you pay for your car insurance, there are a few that truly make a big impact.
You may not be able to change where you live, or the type of car you drive. However, when it comes to your driving record, you’re absolutely in control. Do your best to keep a clean record. Drive safe, and avoid traffic tickets and at-fault accidents. If you do all of this, you’ll be on the road to lower car insurance premiums.